END-OF-SERVICE AWARD REGULATIONS

    • linkedin
    • linkedin
  • Upon the end of the work-bound relation, the employer shall pay the worker an end-of-service award equal to a half-month wage for each of the first five years and a one-month wage for each year of the following years. The end-of-service award shall be calculated on the basis of the last wage, and the worker shall be entitled to have an end-of-service award for the portions of the year in proportion to the time he spent on the job.
  • If the work-bound relation ends due to the worker’s resignation, and his service is less than two years, he shall not be entitled to end-of-service award.
  • If the end-of-service relation is due to the resignation of the worker and his service is not less than two years and up to 5 years, the worker shall be entitled to one third of the reward.
  • If the end-of-service relation is due to the resignation of the worker and his service is more than (5) years and is less than (10) years, the worker shall be entitled to two thirds of the reward.
  • If the end-of-service relation for a female worker is within (6) months of her marriage or three months from the date of giving birth, such a female worker shall be entitled to a full reward.
  • The worker shall be entitled to the full award if he leaves the work due to a force majeure.
  • The employer and the worker may agree that the wage used as a basis for calculating the end-of-service award does not include all or some of the commissions, percentages, and similar wage components paid to the worker which are by their nature subject to increase or decrease.
  • The term 'wage' shall means the basic wage in addition to all other due increases that are determined for the worker in return for the 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.

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.