Saudi Gratuity Calculator — End-of-Service Benefit (KSA Labor Law)
Saudi Arabia's end-of-service benefit (ESB) rewards your years of service when a job ends. Under the KSA Labor Law the award is half a month's wage for each of the first five years and a full month's wage for every year beyond five — but if you resign rather than being let go, you receive only a fraction depending on how long you stayed. This calculator applies both rules and shows the rupee equivalent for Indian expats planning their return.
🇸🇦 Calculate End-of-Service Benefit
How Saudi End-of-Service Gratuity Is Calculated
The base award uses your last drawn wage (basic plus regular allowances) and your total service:
- First 5 years: half (½) of one month's wage for each year
- After 5 years: one full month's wage for each additional year
- Partial years are paid pro-rata.
So an employee on SAR 9,000 with 7 years' service earns (0.5 × 9,000 × 5) + (1 × 9,000 × 2) = SAR 22,500 + SAR 18,000 = SAR 40,500 if the employer ends the contract.
Resignation reduces the award
If you resign (rather than being terminated), the KSA Labor Law pays only part of the calculated award, based on continuous service:
| Service on resignation | Share of the award you receive |
|---|---|
| Less than 2 years | Nothing |
| 2 to 5 years | One-third (1/3) |
| 5 to 10 years | Two-thirds (2/3) |
| More than 10 years | Full award |
Termination by the employer, or the natural end of a fixed-term contract, always pays the full award regardless of length.
Saudi gratuity in rupees, and the India tax treatment
To convert to rupees, multiply the SAR figure by the current SAR-to-INR rate (around ₹22–23 per SAR). For an NRI, the gratuity earned for services rendered in Saudi Arabia while non-resident is not taxable in India — remit it to an NRE account to keep it tax-free and repatriable. There is no TCS on bringing it home; TCS only applies to money sent out of India, as explained in our TCS on remittance calculator.
How Saudi differs from UAE and India
The three Gulf/India formulas are easy to confuse. The UAE uses 21 days' pay per year for the first five years and 30 days after — see the UAE gratuity calculator. India's Payment of Gratuity Act uses a 15/26 formula after five years of service — see the India gratuity calculator. Saudi Arabia uses the half-month/full-month split above.
Worked Examples by Wage and Service
End-of-service benefit if the employer ends the contract (full award), at different wages and tenures:
| Last wage (SAR) | 5 years | 10 years | 15 years |
|---|---|---|---|
| SAR 5,000 | SAR 12,500 | SAR 37,500 | SAR 62,500 |
| SAR 9,000 | SAR 22,500 | SAR 67,500 | SAR 1,12,500 |
| SAR 15,000 | SAR 37,500 | SAR 1,12,500 | SAR 1,87,500 |
The pattern is straightforward: the first five years build at half a month per year, then every year after five builds twice as fast at a full month per year. That is why staying past the five-year mark sharply increases the payout — a 10-year award is three times the 5-year award, not double.
Limited vs unlimited contracts
Under a limited (fixed-term) contract that runs to its natural end, you receive the full end-of-service award. Under an unlimited contract, the full award applies when the employer terminates you; if you resign, the reduced fractions in the table above apply based on your years of service. Either way, the calculation of the base award is identical — only the payable share changes.
What counts as "wage" and when it's paid
The award is based on your last drawn wage, which under the Saudi Labor Law generally means basic salary plus regular allowances paid as part of the wage (such as a fixed housing or transport allowance), but not discretionary bonuses, overtime or commissions unless contractually fixed. The employer must settle the end-of-service benefit, along with any unpaid salary and accrued leave, within the statutory period after the contract ends — typically within one to two weeks of the final working day.