Master the End of Service Benefits Calculator in Saudi Arabia: A 2026 Compliance Guide

The End of Service Benefit (EOSB), commonly known as “gratuity,” is the most significant financial right of an employee in the Kingdom. As Saudi Arabia continues its journey toward Vision 2030, the legal framework surrounding these payments has become more precise.

Whether you are an HR manager or an expatriate professional, understanding how to use the end of service benefits calculator in saudi arabia is essential to ensure transparency and avoid legal disputes.

1. What is the End of Service Benefit (EOSB)?

Under Article 84 of the Saudi Labor Law, the EOSB is a mandatory reward paid by the employer to the worker at the end of the employment contract. In 2026, this benefit applies to all sectors and is calculated based on the employee’s Actual Wage (Basic salary + fixed allowances like housing and transport).

The Fundamental Accrual Formula:

For the first 5 years: Half a month’s wage for each year of service.
For years beyond 5: One full month’s wage for each subsequent year.

2. Using the End of Service Benefits Calculator: Resignation vs. Termination

The most common mistake when using an end of service benefits calculator in saudi arabia is ignoring the reason for departure. Article 85 dictates how the amount is reduced if the employee resigns.

A. Calculation if Terminated (or Contract Expires)

If the employer terminates the contract or it reaches its natural end, the employee is entitled to the Full Award (100%)

B. Calculation if the Employee Resigns

If you choose to leave, the entitlement is scaled based on your tenure:

Tenure	Entitlement Share	Requirement
Less than 2 years	0%	No benefit is paid.
2 to 5 years	1/3 (33.3%)	One-third of the accrued award.
5 to 10 years	2/3 (66.6%)	Two-thirds of the accrued award.
10+ years	Full (100%)	Full award is paid despite resignation.

3. Key Factors Influencing the Calculation in 2026

Partial Years: The end of service benefits calculator in saudi arabia must account for months and days proportionally. For example, 5 years and 6 months should be calculated as 5.5 years.
Actual Wage vs. Basic Wage: Ensure you use the “Actual Wage” (basic + housing + transport). Excluding fixed allowances is a frequent cause of labor court cases.
Unpaid Leave: Periods of unpaid leave (not including sick leave or maternity leave) do not count toward the service duration.

4. Official Government Calculators

To ensure 100% accuracy, always cross-reference your internal math with the official portals:

MHRSD Portal: The Ministry provides an automated Labor Calculator on their website.
Qiwa Platform: Employees can now view their estimated end-of-service reward directly through their individual Qiwa accounts under the “My Current Job” section.

5. Exceptions to the Rules (Article 80 & 81)

Forfeiture (Article 80): If an employee is dismissed for gross misconduct (e.g., assault or theft), they may forfeit their entire end-of-service benefit.
Full Award Regardless of Tenure (Article 81): If an employee leaves because the employer failed to meet contractual obligations or due to Force Majeure, they are entitled to the full award even if they have served less than 2 years.

6. How Connect Resources Saudi Simplifies Your Compliance

Managing EOSB accruals is a complex financial burden for companies. Connect Resources Saudi provides a seamless solution:

PEO/EOR Services: We take on the legal sponsorship and manage all end-of-service calculations and payments, shielding you from liability.
Automated Payroll: Our systems integrate the latest end of service benefits calculator in saudi arabia logic, ensuring that your monthly accrual reports are always accurate.
Expert Advice: We guide you through the intricacies of Article 77 (compensation for termination) versus Article 84 (gratuity)

7. Conclusion: Transparency Builds Trust

The end of service benefits calculator in saudi arabia is more than just a mathematical tool; it is a symbol of the fair and professional labor market KSA is building. By using the correct formulas and ensuring timely payments, companies can maintain a high-reputation “Nitaqat” status and attract top international talent.