# What is Saudi end-of-service award?

The Saudi end-of-service award is the terminal payment owed under the Saudi Labour Law, calculated at half a month's wage per year for the first five years and a full month thereafter.

## Saudi end-of-service award explained

The standard calculation is 15 days' wage for each of the first five years of service and 30 days' wage for each subsequent year, based on the final wage.

Resignation reduces entitlement on a sliding scale: no award below two years, one third between two and five years, two thirds between five and ten years, and the full amount after ten years. Termination by the employer does not attract this reduction.

This differs materially from the UAE gratuity formula, which is one reason a single GCC payroll system has to hold both calculations rather than generalising one.

## How NeuralHR.AI handles Saudi end-of-service award

- [End-of-service benefits Saudi](https://neuralhr.ai/en/end-of-service-benefits-saudi)

## Related terms

- [GOSI](https://neuralhr.ai/en/hr-glossary/gosi): GOSI is Saudi Arabia's social insurance authority, collecting mandatory contributions from employers and employees to fund pensions and occupational hazard cover.
- [End-of-service gratuity](https://neuralhr.ai/en/hr-glossary/gratuity): End-of-service gratuity is the lump sum a UAE employer owes an employee with at least one year of continuous service, calculated on basic salary under Federal Decree-Law No. 33 of 2021.

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Last verified: 2026-08-01

Published by NeuralHR.AI — AI-native HR and payroll platform for the UAE, Saudi Arabia and India.