Two employees join the same company on the same day, earn the same salary and leave on the same day. One walks away with SAR 45,000, the other with SAR 30,000. The only difference is how their contracts ended. In Saudi Arabia, the reason you leave matters as much as how long you stayed.
The full award (Article 84)
When an employer ends the contract, or a fixed-term contract simply expires, the worker receives the full end-of-service award: half a month’s wage for each of the first five years and a full month’s wage for each year after that. Partial years count proportionally.
The wage used is your last actual wage. That normally means basic salary plus regular fixed allowances such as housing and transport, not just the basic figure on your offer letter.
The resignation scale (Article 85)
If you resign, the law gives you a share of the full award based on your total service:
| Service at resignation | Share |
|---|---|
| Under 2 years | Nothing |
| 2 to under 5 years | One third |
| 5 to under 10 years | Two thirds |
| 10 years or more | The full award |
Same job, two endings
Take a wage of SAR 10,000 and seven years of service. The full award is (5 × 5,000) + (2 × 10,000) = SAR 45,000.
- Contract ends or the employer terminates: SAR 45,000.
- Employee resigns: two thirds of 45,000 = SAR 30,000.
Now push the same person to ten years. The full award becomes (5 × 5,000) + (5 × 10,000) = SAR 75,000, and at that point resignation no longer reduces it. That is why some employees close to a threshold choose to wait a few months before handing in their notice.
When resignation still pays in full
Article 87 protects a few situations. You receive the full award, even though you are the one leaving, if you leave because of force majeure beyond your control, or if a female worker ends her contract within six months of marriage or within three months of giving birth. Cases where the employer has seriously breached the contract can also change the outcome, and those are often settled through the labour courts.
Practical tips
- Check your exact start date, including probation, before choosing a leaving date.
- Look at the components of your last payslip to confirm the wage used.
- Get any agreement about the reason for leaving in writing.
- Run both scenarios in a calculator so you know what is at stake.
This article is general information, not legal advice. For disputes, contact the Ministry of Human Resources and Social Development or a qualified labour lawyer.
The numbers at a glance
Using a last monthly wage of 10,000 riyals, here is what different lengths of service pay under Article 84 (contract ended by the employer or expiry) and Article 85 (resignation):
| Service | Full award (Art. 84) | If you resign (Art. 85) |
|---|---|---|
| 1 year 6 months | 7,500 | 0 |
| 3 years | 15,000 | 5,000 (one third) |
| 5 years | 25,000 | 16,667 (two thirds) |
| 8 years | 55,000 | 36,667 (two thirds) |
| 10 years | 75,000 | 75,000 (full) |
The jump at each threshold is large. Someone with four years and eleven months of service who resigns gets one third; wait one more month and the share rises to two thirds of a larger amount.
Part years count
Service is counted including fractions of a year. Six years and four months at 10,000 a month comes to 25,000 for the first five years, 10,000 for the sixth, and about 3,333 for the four extra months: roughly 38,333 in total under Article 84.
What “wage” means here
The award is calculated on the last wage. Under the Saudi Labour Law, the actual wage generally includes the basic wage plus regular allowances paid as part of the employment, such as housing, depending on the contract. Check what your contract and your record on Qiwa list as your wage, because that is what the calculation will be based on.
Before you hand in your resignation
- Count your exact service days from your start date, including any probation period served.
- Check how close you are to the 2, 5 and 10-year thresholds.
- Confirm your last wage and which allowances count.
- Ask HR for a written estimate of your end-of-service benefit and leave balance.
- Do not sign a final clearance until the figures match.
The full Labour Law and guidance are available from the Ministry of Human Resources and Social Development.
Frequently asked questions
Do I get anything if I resign before two years?
No. Under Article 85 a resigning employee with less than two years of service is not entitled to the award.
Does a fixed-term contract ending count as resignation?
If the contract simply expires, the full award under Article 84 normally applies, not the resignation scale.
Are there cases where resignation still pays in full?
Yes, for example a female employee who ends her contract within six months of marriage or three months of giving birth, and resignations caused by force majeure or by the employer’s breach in cases set out in the law.
This article is general information, not legal advice.