If your basic salary is SAR 3,000, how much End of Service Benefit (EOSB) are you entitled to in Saudi Arabia? The answer depends on whether you resign or your employment is terminated by the employer, as well as your total years of service.
This guide explains the EOSB calculation with simple examples based on the Saudi Labor Law.
Important: End of Service Benefit is generally calculated using the Basic Salary, not the total monthly salary.
What is End of Service Benefit (EOSB)?
End of Service Benefit is a financial entitlement paid to employees when their employment ends, provided they meet the requirements under the Saudi Labor Law.
According to Article 84, the standard EOSB calculation is:
- Half a month’s basic salary for each of the first five years of service.
- One full month’s basic salary for each year after the first five years.
For a Basic Salary of SAR 3,000:
- Half-month salary = SAR 1,500
- One-month salary = SAR 3,000
Example 1: Resignation After 3 Years
Standard EOSB:
3 × SAR 1,500 = SAR 4,500
Under the resignation rules:
Employees with 2 to less than 5 years of service receive one-third (1/3) of the calculated EOSB.
Calculation:
SAR 4,500 ÷ 3 = SAR 1,500
EOSB Payable: SAR 1,500
Example 2: Resignation After 5 Years
Standard EOSB:
5 × SAR 1,500 = SAR 7,500
One-third entitlement:
SAR 7,500 × 1/3 = SAR 2,500
EOSB Payable: SAR 2,500
Example 3: Resignation After 7 Years
First 5 years:
5 × SAR 1,500 = SAR 7,500
Next 2 years:
2 × SAR 3,000 = SAR 6,000
Total EOSB:
SAR 13,500
Employees with 5 to less than 10 years of service receive two-thirds (2/3) of the calculated EOSB.
Calculation:
SAR 13,500 × 2/3 = SAR 9,000
EOSB Payable: SAR 9,000
Example 4: Resignation After 10 Years
First 5 years:
SAR 7,500
Next 5 years:
SAR 15,000
Total EOSB:
SAR 22,500
Employees completing 10 years or more receive 100% of the calculated EOSB.
EOSB Payable: SAR 22,500
If the Employer Terminates the Employment
If the employer terminates the employee’s contract (and the case does not fall under Article 80), the employee is generally entitled to the full End of Service Benefit calculated under Article 84.
Years of Service
Full EOSB (SAR)
3 Years
SAR 4,500
5 Years
SAR 7,500
7 Years
SAR 13,500
10 Years
SAR 22,500
EOSB Summary for a Basic Salary of SAR 3,000
Service Period
If Employee Resigns
If Employer Terminates
3 Years
SAR 1,500
SAR 4,500
5 Years
SAR 2,500
SAR 7,500
7 Years
SAR 9,000
SAR 13,500
10 Years
SAR 22,500
SAR 22,500
Frequently Asked Questions (FAQs)
Is EOSB calculated on the total salary?
No. In most cases, EOSB is calculated using the basic salary, unless the employment contract or applicable legal provisions specify otherwise.
Does changing employers through a local transfer automatically guarantee 100% EOSB?
No. Your entitlement depends on how your employment ended, your length of service, and the applicable provisions of the Saudi Labor Law.
Can I receive EOSB after resigning?
Yes. Depending on your years of service and the applicable legal rules, you may be entitled to part or all of your EOSB.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Actual EOSB entitlement may vary depending on your employment contract, years of service, salary structure, and the applicable provisions of the Saudi Labor Law at the time your employment ends.
