End of Service Benefits in Saudi Arabia: 2025 Guide

Know the rules, calculation method, and legal risks of mishandling end-of-service pay (EOSB) in the Kingdom.

1. What Are EOSB in KSA?

EOSB = Compensation paid to employees when they leave the company due to resignation, retirement, or termination. Required by Saudi Labour Law (Article 84–87)

2. Who Qualifies for EOSB?

All employees (Saudi & expat) with ≥2 years of service Applies to both fixed-term & unlimited contracts Exceptions: Dismissal for gross misconduct

2. Who Qualifies for EOSB?

3. EOSB Calculation Formula

Formula: Half-month salary × first 5 years Full-month salary × years after 5 Salary = basic wage (no allowances)

4. What If the Employee Resigns?

< 2 years: No EOSB 2–5 years: 1/3 of amount 5–10 years: 2/3 of amount > 10 years: Full EOSB Special clauses apply to women & retirement

5. Legal & Financial Risks

Underpayment = lawsuits Delays = reputational damage Overpayment = financial loss Automate EOSB with full accuracy

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