Termination of the contract
Article 85 of the Saudi Labour Law:what a resigning worker is owed
Article 85 reduces end-of-service pay on resignation according to length of service: nothing before two years, then a third, then two thirds, then the full amount at ten years or more.
- Article 85
- Explanatory guidance
Everyone who resigns asks how much they are owed. Article 85 answers that. It applies only to resignation, and other ways of ending a contract leave the gratuity intact.
The scale works on top of Article 84. First calculate the full gratuity under Article 84. Then pay a third, two thirds or all of it, depending on length of service.
The text of the article
Where the employment relationship ends because the worker resigns, the worker is entitled to one third of the award after service of not less than two consecutive years and not more than five years; to two thirds if service exceeds five consecutive years but is less than ten; and to the full award if service reaches ten years or more.
Status of the text: This article has not been amended; the text below is the original operative text.
The official reference is the Arabic text published by the Bureau of Experts at the Council of Ministers.
The English above is a working translation.
The scale in figures
Under two years: nothing. Two to five years: one third. More than five and under ten: two thirds. Ten years or more: the full award.
For example, an employee resigns after six years on a final wage of 8,000 riyals. The Article 84 gratuity is 28,000. Service is between five and ten years, so two thirds is payable: about 18,667 riyals.
Resignation only
The scale does not apply when a fixed term expires, when the employer ends the contract, at retirement age, or on permanent closure. Those are other grounds under Article 74, and the full gratuity is still payable.
Full payment even though the employee left
Article 87 makes two exceptions: leaving because of force majeure beyond the employee's control, and a female employee ending her contract within six months of her marriage or three months of giving birth. In both, the full award is payable.
An employee who leaves under Article 81 because of the employer's breach also keeps all statutory entitlements, including the full gratuity. The resignation scale does not apply.
Before calculating a resigning employee's gratuity
- Check that it really was a resignation and not a termination by the employer recorded as one.
- Compute the full Article 84 gratuity first, then apply the fraction.
- Count service exactly. Five years earns a third, but five years and one month earns two thirds.
- Check the Article 87 exceptions before applying the scale.
- Add payment for untaken leave. It is a separate entitlement, and resignation does not reduce it.
Common mistakes
Applying the scale to every ending
The text limits it to resignation. When a contract expires or the employer ends it, the full gratuity is due.
Denying everything before two years
No gratuity is due, but wages, untaken leave and other dues remain payable.
Overlooking Article 87
Force majeure, marriage or childbirth within the stated periods restore the full award.
Rounding service
Near the two-, five- and ten-year marks a few days can change the fraction, so count service by the day.
How Barez applies this article
The fraction is applied automatically
When resignation is selected as the reason, Barez applies the fraction for the employee's length of service.
Service counted by the day
Service is counted in days from the start date to the end date, so no time is lost near a threshold.
A record of the resignation
The resignation request and its approval are timestamped, which shows the employee resigned.
Sources
This page is explanatory guidance, not legal advice. In a dispute, rely on the official text and consult the Ministry of Human Resources and Social Development or a licensed lawyer.
Article 85
Frequently asked questions
How much gratuity does a resigning employee get in Saudi Arabia?
Nothing before two years, one third from two to five years, two thirds above five and under ten, and the full award at ten years or more.
Is the fraction taken from the full gratuity?
Yes. The award is first calculated under Article 84 on the final wage and length of service, then the third or two thirds is applied.
When is the full award payable before ten years?
When the employee left because of force majeure beyond their control, or a female employee ended her contract within six months of marriage or three months of childbirth (Article 87). It is also payable in full when the employee left under Article 81.
Labour law articles
Continue from here
Article 84: calculating the gratuity
The formula applied before the fraction.
End-of-service calculator
Compute the amount with the resignation scale applied.
Article 81: leaving with full entitlements
When an employee who leaves is not subject to the resignation scale.
Article 74 of the Saudi Labour Law: when an employment contract ends
Article 74 lists every ground on which an employment contract ends, including resignation and bankruptcy rulings, both added in 1446H. The ground decides what the employee is owed, so settle it first.
Article 77Article 77 of the Saudi Labour Law: compensation for unlawful termination
Article 77 sets a fixed formula for compensation: fifteen days' wage per year of service on an indefinite contract, or the wage for the remaining term on a fixed one, and never less than two months' wage.
Article 80Article 80 of the Saudi Labour Law: nine cases for dismissal without gratuity
Article 80 is a narrow exception to employee protection. It lists nine cases that allow termination without gratuity, notice or compensation. In every case, the employee must first be given the chance to object.
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