Complete Guide to End of Service Benefit EOSB in Saudi Arabia 2026

Leaving a job in Saudi Arabia? One of the most important financial questions you will face is your End of Service Benefit, commonly known as EOSB or gratuity. Under Saudi Labor Law, most employees are entitled to a lump-sum payment when their employment ends. The amount depends on your years of service, salary, and reason for leaving.

This guide explains exactly how EOSB is calculated in 2026, what Article 84 and Article 85 mean for you, and common mistakes that cost expats thousands of Riyals. Use our free EOSB Calculator to estimate your benefit instantly.

• First 5 years: Half a month of basic salary per year.
• After 5 years: One full month of basic salary per year.
• Partial years: Calculated proportionally.
• Resignation reduction: Article 85 applies if you resign before your contract ends.
• Fixed-term contracts: Employer may deduct up to 50% for early resignation.

1. Step 1: Note your basic monthly salary in SAR.
2. Step 2: Calculate total years and months of continuous service.
3. Step 3: Apply Article 84: half-month salary for first 5 years, full month for each additional year.
4. Step 4: If you resigned, check Article 85 reduction rules.
5. Step 5: Add proportional amounts for partial months or years.

Example: Basic salary 10,000 SAR, 7 years and 6 months of service, resigning after 5 years.

First 5 years: 5 x 5,000 SAR = 25,000 SAR
Years 6-7: 2 x 10,000 SAR = 20,000 SAR
Partial 6 months: 0.5 x 10,000 SAR = 5,000 SAR
Total EOSB (Article 84): 50,000 SAR
Resignation reduction (5-10 years): 2/3 applied
Final EOSB: 33,333 SAR

• Mistake 1: Assuming EOSB includes housing and transport allowances. It usually does not.
• Mistake 2: Forgetting to claim unused vacation pay, which is separate from EOSB.
• Mistake 3: Not getting a signed acknowledgment from HR before leaving.
• Mistake 4: Missing the 2-year rule under Article 85 for resignation EOSB.

How is EOSB calculated in Saudi Arabia for 2026?

EOSB is calculated per Saudi Labor Law Article 84: half a month's basic salary for each of the first 5 years, and one full month's basic salary for each subsequent year. Partial years are calculated proportionally.

Do I get end of service benefits if I resign before 2 years?

No. Under Article 85 of the Saudi Labor Law, employees who resign with less than 2 years of continuous service are not entitled to any End of Service Benefits.

Is EOSB calculated on basic salary or total salary?

EOSB is generally calculated on your basic salary only. Housing allowance, transportation allowance, commissions, and other benefits are typically excluded unless your contract states otherwise.

How much gratuity do I get if I resign after 3 years?

If you resign between 2 and 5 years of service, you receive one-third (1/3) of the full EOSB amount. For example, with a 10,000 SAR basic salary and 3 years: full EOSB = 15,000 SAR. You get 15,000 x 1/3 = 5,000 SAR.

Can my employer deduct from my EOSB for early resignation?

Yes. If you have a fixed-term contract and resign before it ends, your employer may deduct up to 50% of your EOSB to cover damages. This is separate from the Article 85 reduction.

How is EOSB calculated for partial years of service?

Partial years are calculated proportionally. If you worked 6 months beyond a full year, you receive half of that year's entitlement. Example: 10,000 SAR yearly entitlement for 6 months = 5,000 SAR.

What is the difference between termination and resignation EOSB?

If your employer terminates your contract, you are entitled to the full EOSB with no reduction. If you resign, Article 85 applies a reduction: 0% under 2 years, 1/3 between 2-5 years, 2/3 between 5-10 years, and 100% after 10 years.