CALCULATING END-OF-SERVICE AWARD

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1. The end-of-service award shall be considered to be the worker's entitlements which the employer shall be him in the event of the termination of the work contract; the Saudi labor law makes it obligatory for the employer to pay it to the worker at the end of the work contract, whether the work contract is of a fixed or non-fixed term. Therefore, we have further facilitated the method of calculating the end-of-service award, the date of entitlement to the award, and the calculation method according to the rules and regulations of the Saudi labor law.

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The worker’s last total actual wage shall be taken as a basis for calculating the reward. Article (2) of the Labor Law defines wage as the basic wage, in addition to all other due increase that are determined for the worker in return for an effort made in the work, or risks he is exposed to in performing his work, or that are determined for the worker in exchange for work according to the work contract or labor regulations, allowances, increases, awards and promotions, and in-kind features, commissions and percentages. Concerning commissions and percentages according to the labor law definition of award in Article (2), commissions and percentages fall within the elements of the award for which the end-of-service award is calculated, taking into account what is stated in Article (86) of the labor law that “it is permissible to agree that it is not calculated in the award according to which end-of-service award is settled or part of the commissions amounts and percentages of the sales price and the like, which are elements of the wage paid to the worker and are inherently subject to increase and decrease.