Saudi end of service when you resign: the one third and two thirds rule
Short answer: in Saudi Arabia, resigning reduces your end-of-service award. You get nothing under 2 years, one third for 2–5 years, two thirds for 5–10 years and the full award from 10 years.
First, the full award
Article 84 of the Saudi Labour Law sets the full award: half a month's wage for each of the first five years and a full month's wage for each year after that, based on your last wage, with part years paid in proportion. This full amount is what you get when the employer ends the contract.
Then, the resignation ladder
Article 85 applies when you resign. Here is what that means with a monthly wage of 10,000 SAR:
| Service when you resign | Your share | Full award | You receive |
|---|---|---|---|
| 1 year 6 months | None | 7,500 SAR | 0 SAR |
| 4 years | One third | 20,000 SAR | 6,667 SAR |
| 7 years | Two thirds | 45,000 SAR | 30,000 SAR |
| 12 years | Full | 95,000 SAR | 95,000 SAR |
Timing matters
Resigning just before a threshold can cost a lot. With the same 10,000 SAR wage, resigning at 4 years 11 months gives about 8,200 SAR. Waiting until 5 years 1 month gives about 17,200 SAR, because your share jumps from one third to two thirds. If you can, check your exact dates in the calculator before you hand in your notice.
When you get the full award even though you resign
- Force majeure: you leave because of circumstances beyond your control (Article 87).
- Marriage or childbirth: a female employee who ends her contract within six months of marriage or three months of giving birth (Article 87).
- Employer breach: leaving because the employer seriously broke the contract or the law (Article 81) is not treated as a normal resignation.
Which wage is used
Saudi law uses the actual wage: basic pay plus fixed allowances such as housing and transport. That is different from Qatar and the UAE, where only the basic salary counts. Commissions and similar variable pay can be excluded if you and your employer agreed to that.
When it must be paid
The employer must pay within one week of the end of employment, or within two weeks if you resigned.