Resignation or dismissal: how the end-of-service award changes in Saudi Arabia
Whether a worker resigns or is dismissed changes the Saudi end-of-service award, and the change can be large. This guide goes through the Labor Law (Royal Decree No. M/51) as the English translation on the Ministry of Human Resources and Social Development site gives it, and works examples you can repeat on the end-of-service award calculator. It covers private sector workers and says plainly what could not be checked.
The full award: Article 84
Article 84 says that when the employment relation ends, the employer pays an award equal to half a month's wage for each of the first 5 years and a one-month wage for each year after that. It is worked on the last wage, and a part of a year counts in proportion to the time spent on the job. On a monthly wage of SAR 10,000 that is SAR 5,000 for each of the first 5 years and SAR 10,000 for each later year. After 7 years the award is 4.5 months of wage, SAR 45,000.
This full award is what a worker gets when the employer ends the contract without an Article 80 cause, when a fixed term expires (Article 74(2)), and in the other endings listed in Article 74 that do not involve a resignation. The Ministry's knowledge centre page on the award says the same.
What a resignation does: Article 85
If the employment relation ends because the worker resigns, Article 85 pays a share of the award that grows with service. Under 2 years there is nothing. From 2 years the worker gets one third, from more than 5 years two thirds, and from 10 years the full award. The table shows the effect on a wage of SAR 10,000.
| Service | Dismissal or expiry | Resignation | Difference |
|---|---|---|---|
| 1 year | SAR 5,000 | SAR 0 | SAR 5,000 |
| 2 years | SAR 10,000 | SAR 3,333 | SAR 6,667 |
| 3 years | SAR 15,000 | SAR 5,000 | SAR 10,000 |
| 5 years | SAR 25,000 | SAR 8,333 | SAR 16,667 |
| 6 years | SAR 35,000 | SAR 23,333 | SAR 11,667 |
| 7 years | SAR 45,000 | SAR 30,000 | SAR 15,000 |
| 9 years | SAR 65,000 | SAR 43,333 | SAR 21,667 |
| 10 years | SAR 75,000 | SAR 75,000 | SAR 0 |
| 12 years | SAR 95,000 | SAR 95,000 | SAR 0 |
| 20 years | SAR 175,000 | SAR 175,000 | SAR 0 |
Take 7 years. A dismissal pays SAR 45,000, and a resignation pays two thirds of that, SAR 30,000, which is SAR 15,000 less. At 3 years the full award is SAR 15,000 and a resignation pays a third of it, SAR 5,000. At 12 years the two are the same, SAR 95,000.
Where the lines fall
Article 85 reads "not less than two consecutive years and not more than five years" for one third, "in excess of five consecutive years but less than 10 years" for two thirds, and "10 years or more" for the full award. Read literally, exactly 5 years is in the one-third band and exactly 10 years is in the full band. The Ministry's knowledge centre and its December 2025 awareness guide give the same bands. On SAR 10,000, 5 years pays SAR 8,333 on resignation, while 5.01 years pays SAR 16,733. A worker a few weeks short of a line can see a gap of thousands of riyals, so the exact first and last day matter. This site counts calendar years from the first day to the last day, both included, with a part year in proportion; a payroll that counts months can put the line a few days elsewhere.
Exceptions that give the full award: Article 87
Article 87 makes an exception to Article 85. The worker is entitled to the full award if he leaves the work because of a force majeure beyond his control. A female worker is also entitled to the full award if she ends her contract within six months of her marriage or three months of giving birth. In the calculator these are the fourth choice of reason. The Ministry's pages repeat both exceptions. The Law text read does not define force majeure further.
Other endings and what they do to the award
| How the contract ends | What the text read says | Article |
|---|---|---|
| Employer ends it without a cause | Full award. If the reason is invalid, compensation is due as well: 15 days of wage for each year on an indefinite contract, or the wage for the rest of a fixed term, and never less than two months of wage | 84, 77 |
| A fixed term expires | The contract ends on expiry. The full award is due | 74(2), 84 |
| Employer dismisses for a cause listed in Article 80 | Without an award, advance notice or indemnity, after the worker has been heard | 80 |
| Contract ends during probation | Neither side owes compensation and the worker has no award | 54, 80(6) |
| Worker leaves without notice for an employer breach | Allowed "without prejudice to all of his statutory rights" in the seven cases listed. The text read does not say how Article 85 applies, and the calculator does not model it | 81 |
| Worker resigns | A share of the award by length of service, or the full award in the Article 87 cases | 85, 87 |
The compensation for an invalid termination in Article 77 is a separate payment from the award, so a worker can be owed both. The calculator shows the award only.
Which wage counts
Article 84 uses "the last wage". Article 2 defines the wage as the actual wage: the basic wage plus the other increments due under the contract, such as allowances for effort or risk, living-cost and family increments, regular grants and in-kind benefits valued in the Article. Article 86 lets the parties agree to leave out commissions and similar variable pay when the award is worked out. The calculators use the whole monthly wage you enter, so enter basic wage plus the allowances your contract makes part of the wage.
Payment and deductions
Article 88 gives the employer one week from the end of the contract to pay wages and settle entitlements, and two weeks if the worker is the one who ends it. The employer may deduct any work-related debt due to him. A claim goes to the labour dispute bodies; the Ministry's awareness guide points to an amicable settlement route before that.
What this check could not confirm
The Law file read is the 2005 translation, and the amended text of Royal Decree M/44 (in force from February 2025) could not be opened, so every article above is as the 2005 text gives it. The Ministry's own awareness guide of December 2025 repeats the same award scale, resignation bands and exceptions, which is the reason they are used here. How the 2025 definition of resignation for fixed-term contracts works with Article 85 was not confirmed. The Ministry's own award calculator was not run for a comparison.
Calculate the awardSources
- Ministry of Human Resources and Social Development: Labor Law, Royal Decree No. M/51 (English translation, Articles 2, 54, 74, 77, 80, 81, 84 to 88)
- Ministry of Human Resources and Social Development: End-of-service award regulations
- Ministry of Human Resources and Social Development: Awareness guide on the rights and duties of employers and workers (December 2025)
- Every rule used, with its source and check date: Sources and rates
This calculator is general information only. It follows the Saudi Labor Law (Royal Decree No. M/51) as listed on the Sources page, and your contract, payroll and personal situation may differ. Rules as at 2 November 2026.