Leaving your job in Saudi Arabia? One of your most important rights is the End of Service Benefit (ESB), also called end-of-service gratuity or "mukafat nihayat al-khidma." This guide explains how ESB is calculated under the Saudi Labor Law, when you are entitled to the full or a reduced amount, and what to do if your employer refuses to pay it.
What is the End of Service Benefit?
The End of Service Benefit is a lump sum your employer must pay you when your employment ends. It is a legal right for all private-sector workers in Saudi Arabia — Saudi and non-Saudi alike — based on your length of service and your last wage.
How is ESB calculated in Saudi Arabia?
The Saudi Labor Law sets the ESB formula as follows, based on your last (final) wage:
- Half a month's wage for each of the first five years of service.
- One full month's wage for each year after the fifth year.
- Parts of a year are paid proportionally (pro-rata) for the time actually worked.
Does resignation reduce my ESB?
For an indefinite-term contract, if you resign the amount you receive depends on your years of service:
- Less than 2 years: no ESB.
- 2 to 5 years: one third of the benefit.
- 5 to 10 years: two thirds of the benefit.
- 10 years or more: the full benefit.
If your employer terminates you (not a resignation), you are generally entitled to the full ESB. There are also cases where you keep the full benefit even when you end the contract — for example a female worker ending her contract within 6 months of marriage or 3 months of giving birth.
Other entitlements you should not lose
Besides ESB, when your job ends you are also entitled to:
- Any unpaid or delayed wages in full.
- Payment for your unused annual leave balance.
- Compensation for unfair dismissal if you were terminated without a valid reason.
- A notice allowance if you were not given the legal notice period.
What if my employer refuses to pay my ESB?
Your final settlement is a legal right. If it is withheld:
- Do not sign a release/clearance (mukhalasa) giving up your rights before checking your full entitlements with a specialist.
- File an amicable settlement request through the Ministry of Human Resources and Social Development (HRSD).
- If no settlement is reached, the case is referred to the Labor Court to claim your dues.
Get a trusted consultation before you sign
Before signing any settlement or accepting a figure, get a reliable labor consultation to make sure your ESB and final dues are complete — through the Mustashaark app, by chat, voice, or video, with full privacy.
