Saudi Labor Law Article 84: The End of Service Award Rule
Quick answer: Article 84 says that when the work relationship ends, the employer pays an end of service award of half a month's wage for each of the first 5 years and one month's wage for each year after that, based on the last wage. Parts of a year count in proportion. This is the full award; a resignation can reduce it under Article 85.
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The formula
- Up to 5 years: last wage × 0.5 × years.
- More than 5 years: (last wage × 0.5 × 5) + (last wage × years after the fifth).
- Months and days: add them as a fraction of a year, for example 6 months = 0.5 year.
Worked examples
| Service | Last wage | Calculation | Full award |
|---|---|---|---|
| 3 years | 6,000 SAR | 3 × 0.5 × 6,000 | 9,000 SAR |
| 5 years 6 months | 8,000 SAR | 5 × 0.5 × 8,000 + 0.5 × 8,000 | 24,000 SAR |
| 12 years | 10,000 SAR | 5 × 0.5 × 10,000 + 7 × 10,000 | 95,000 SAR |
What counts as the last wage
The award uses the last wage you received. In practice this is usually the basic salary plus fixed allowances such as housing, as defined in the Labor Law and your contract. Commissions or overtime that change every month are often treated differently. See how to calculate end of service for more detail.
When is it paid? (Article 88)
- Within one week of the end of the contract when the employer ended it.
- Within two weeks when the worker ended it.
- Together with the last salary and unused leave: see the final settlement guide.
When the award is full, reduced or lost
| Case | Award |
|---|---|
| Employer ended the contract, or a fixed term ended | Full (Article 84) |
| Worker left under Article 81 | Full |
| Worker resigned | 1/3, 2/3 or full by service (Article 85) |
| Dismissal under Article 80 | None |
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Frequently asked questions
What is Article 84 of the Saudi Labor Law?
It sets the end of service award: half a month's wage for each of the first five years and one month's wage for each later year, on the last wage.
How much end of service for 5 years?
Two and a half months of the last wage. With a 10,000 SAR wage that is 25,000 SAR.
Are months and days counted?
Yes. Parts of a year are paid in proportion to the time worked.
Does Article 84 apply to expats?
Yes. It applies to Saudi and non-Saudi workers in the private sector.
When must the employer pay it?
Within one week if the employer ended the contract and within two weeks if the worker ended it (Article 88).
Official sources
This guide explains the general rules. It is not legal advice.