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Termination of the contract

Article 84 of the Saudi Labour Law:how end-of-service pay is calculated

Article 84 sets the gratuity formula: half a month's wage for each of the first five years and a full month for each year after that. It uses the final wage, and part years are paid pro rata.

  • Article 84
  • Explanatory guidance

Article 84

Frequently asked questions

How is end-of-service pay calculated in Saudi Arabia?

Half a month's wage for each of the first five years and one month's wage for each following year, based on the final wage, with parts of a year paid in proportion to the period served.

Do allowances count towards the gratuity?

Yes. The calculation uses the final wage as the Law defines it: basic pay plus established allowances such as housing and transport. Commissions can be left out by agreement under Article 86.

What is the gratuity after three years of service?

Half a month per year, so one and a half months' wage in total. If the employee resigned, the Article 85 scale applies. If they were dismissed under Article 80, the gratuity is forfeited.

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