End of Service Reward in KSA

What is the End of Service Reward?

End of Service Reward is a commitment issued by the Saudi labor law, in which the employer is obligated to pay a certain amount to a worker upon the termination of their work contract, whether the worker is a Saudi or a non-Saudi. The amount they are paid is determined based on the service interval and the last wage the worker received. 

The End of Service reward is the worker’s right, and they are not permitted to be deprived of this right under any circumstances. The End of Service Reward payment is to help secure people’s future in the event of unemployment, inability to work, or old age.

On what basis is the End of Service Reward calculated?

The End of Service Reward is calculated based on the worker’s service interval and the last wage they received. 

How is the End of Service Reward calculated upon contract expiration?

• The worker should be paid a half-month wage for each of the first five years of service. 
• The worker should be paid one full-month wage for each of the following years.

How is the End of Service Reward calculated upon resignation?

• The worker should be paid one-third of the reward if their service interval was more than two consecutive years but less than five years.
• The worker should be paid two-thirds of the reward if their service interval was more than five consecutive years but less than ten years.
• The worker should be paid the full reward if their service interval exceeds ten consecutive years.

How is the End of Service Reward calculated upon resignation due to force majeure?

The worker should be paid the full reward if they leave work due to a force majeure. 

A force majeure is a section within a contract that frees either employees or employers from obligation if an extraordinary event directly prevents one or both parties from performing.

How is the End of Service Reward calculated for married women and working moms?

A married woman should be paid her full reward if she terminates her work contract within six months from the date of her marriage or three months from the date of childbirth. 

End of Service Reward Calculator 

To calculate the End of Service Reward,  you can use the End of Service Reward Calculator approved by the Ministry of Human Resources and Social Development.

Calculate the End of Service Reward with ZenHR 

In addition to the fully automated calculations of the Service Terminations Reward, ZenHR allows you to customize this method according to your company’s unique needs. You will be able to calculate the End of Service Reward based on the service interval, the remaining period of the contract, or both.