Saudi labor law end of service benefits are among the most important regulations aimed at protecting workers’ rights and ensuring fair treatment between employees and employers. One of the most important provisions of the Labor Law is the end-of-service benefits clause, which specifies how financial compensation to workers is calculated upon termination of employment. In this article, we will review the details of Article 84 of the Saudi Labor Law, which explains how end-of-service benefits are calculated, in addition to the provisions related to domestic workers and the importance of these laws in promoting the rights of all stakeholders.
المحتويات
Saudi Labor Law End of Service Benefits
Article 84 of the labor law is the basis upon which an employee’s entitlement to an end of service benefits Saudi labor law is determined. It precisely defines the criteria and conditions governing how these benefits are calculated based on the employee’s length of service and the last salary they received. This article aims to ensure a fair calculation of the benefits, guaranteeing the employee financial compensation that reflects their efforts and contributions during their employment.
The article stipulates that upon termination of the employment relationship, the employer is obligated to pay the employee benefits calculated on the basis of half a month’s wages for each of the first five years and a full month’s wages for each of the following years. The last wage received by the employee is used as the basis for calculating the benefits. The employee is also entitled to benefits for any part of a year spent at work, proportionate to their length of service.
Read also: End of Service Benefits Saudi Labor Law: Rights After Contract Termination
End of Service Benefits Calculator in Saudi Arabia
If you’re looking for a quick and easy way to calculate your end of service benefits in Saudi Arabia according to Article 84 of the Saudi Labor Law, the Saudi Ministry of Human Resources and Social Development has provided an online tool specifically designed for this purpose. This calculator allows you to accurately calculate your benefits by entering some basic information, such as the start date of your employment contract, the end date of your employment relationship, and the value of your last salary.
Once you’ve entered the required information, simply click the “Calculate Benefits” button and you’ll immediately receive an accurate result based on official regulations.
End of Service Benefits for Household Workers
Household workers are a common profession in the Kingdom of Saudi Arabia, and the new labor law has given special attention to this category to ensure the rights of both the worker and the employer are preserved.
According to Article 22 of the household workers regulations, household workers are entitled to an Saudi labor law end of service benefits
equivalent to one month’s salary for every four consecutive years of service with the employer.
Check out: Article 109 Saudi Labor Law: Employee Leave Rights & Benefits
The Most Important Regulations Governing Household Workers’ Employment Include:
- Limiting the number of working hours to a maximum of nine hours per day, with a break of at least one hour.
- In the event of a partial salary deduction, the deduction may not exceed half the monthly wage.
- Ensuring the worker receives full health care.
- Granting the worker one day off per week.
- Limiting the maximum annual leave to 30 days.
Conditions for Disbursing the Saudi Labor Law End of Service Benefits:
- If the household worker’s length of employment exceeds four years, the Saudi labor law end of service benefits are calculated based on one month’s salary for each additional year.
- If the length of employment is less than four years, the worker is granted the agreed-upon benefits.
- Healthcare costs may not be deducted from the bonus if the employer has committed to covering them.
- Vacation days may not be deducted from the monthly salary.
Finally, Saudi labor law end of service benefits stand out as a vital tool for ensuring workers’ rights in Saudi Arabia, providing them with financial compensation that reflects their efforts and contributions during their employment. Understanding these laws and regulations contributes to fostering positive labor relations and preserving the rights of both workers and employers. Therefore, it is important for every employee to be aware of their rights and responsibilities.
If you need further clarification or assistance, it is recommended that you consult a specialized lawyer from Etqan Law Firm, who can provide accurate legal advice and help you better understand your rights.
Learn about: Article 77 Saudi Labor Law: Employee Compensation Rights
The Etqan Al Mutamayza Law Firm can provide the necessary support. You can contact their team
through the following mobile numbers: 056113776, 0541110440, 504315333
Alternatively, you can visit our branches:
- Jeddah: Al-Aziziyah District–Mohammed bin Abdulaziz Street (Tahlia)
- Riyadh: King Abdulaziz Street – In front of Kingdom
- Dammam: Al-Ashri’a Street, Al-Badeea, Dammam 32415.
FAQ
1. What is included in the end of service benefits in KSA?
Under Saudi labor law, end of service benefits (ESB) are financial entitlements that employees receive upon termination of their employment contract. These benefits are calculated based on the employee’s length of service and final salary. According to Article 84 of the Saudi Labor Law:
The employee is entitled to half a month’s salary for each year of service during the first five years of employment.
For each year after the first five years, the employee is entitled to one month’s salary per year.
The calculation is based on the last salary received by the employee.
If the employee has worked for a portion of a year, they are entitled to a pro-rata benefit for that period.
2. What is the Saudi labor law for expatriates’ final exit?
The final exit process for expatriates in Saudi Arabia is governed by the labor law and the regulations of the Ministry of Human Resources and Social Development (MHRSD). Key rules include:
The employee or employer must apply for a final exit visa through the Absher platform or the MOL system.
The employee must settle all financial obligations (such as loans, traffic fines, and unpaid bills) before applying for the exit.
The employer must provide the employee with:
Full and final settlement of all due wages and benefits.
End of service benefits (if applicable).
The employer is responsible for covering the cost of a return flight to the expatriate’s home country (unless agreed otherwise in the contract).
If the employee’s contract ends or is terminated, the employer is legally required to issue the final exit visa within 60 days from the end of the contract.
3. What is the Saudi labor law about end of contract?
The termination of employment contracts is regulated by Article 74 to Article 77 of the Saudi Labor Law. Key rules include:
An employment contract ends under the following circumstances:
Mutual agreement between the employer and employee.
Expiration of the contract term (unless renewed).
Retirement of the employee (unless otherwise agreed).
Force majeure or closure of the business.
If the contract is terminated by the employer without a valid reason, the employee is entitled to:
End of service benefits.
Compensation equal to the employee’s wages for two months or for the remaining contract period (whichever is shorter).
If the employee resigns voluntarily after two years of service, they are entitled to a reduced end of service benefit as follows:
One-third of the benefit for service between 2–5 years.
Two-thirds of the benefit for service between 5–10 years.
Full benefit for service over 10 years.
Termination for misconduct or breach of contract terms (under Article 80) allows the employer to terminate without notice or end of service benefits.