End-of-Service Benefits for Employees in KSA

Rules and Regulations for Tourists in Saudi Arabia
August 31, 2020

End-of-Service Benefits for Employees in KSA

When an employee stops working for an organization due to the expiry of the contract or any other reason, then he gets end-of-service benefits in Saudi Arabia. It is also known as gratuity which is paid to people who belong from KSA or any other country working within the premises of Saudi Arabia. The rules and regulations of KSA propose that employers should pay off the gratuity to the employees without any delay.

The end-of-service benefit is provided to the employees who have completed two years of serving in any organization of Saudi Arabia. If their years of service are less than two years, then the employer is not liable to provide them a gratuity. To get the end of service benefits, the employees must abide by the terms stated in the contract. Failing to comply with the rules deprives the employee of getting end of service benefit.   

Gratuity for Resigning Employees in Saudi Labour Law

When an employee decides to hand over his resignation letter to the employer, he should have a clear understanding of what his rights and responsibilities are. Wrapping up the leftover tasks which were a part of his job and getting gratuity should be the priorities of a leaving employee. The end of service benefits for employees resigning from their job in KSA are provided as:

  • If an employee resigns before completing 2 years of service at the organization, then he would not get any percentage of his salary or end of service benefits.
  • If an employee decides to resign after 2 years of service but his service period is less than 5 years, then he received 1/3 of gratuity. In this case, the end of service benefit is calculated by including a percentage of half the monthly wage of the employee.
  • If the service period of the employee is between 5 to 10 years, then he is entitled to 2/3 of gratuity. For calculating the end of service benefit in this case, you should consider the full salary of the resigning employee.
  • If the employee has served the organization for more than 10 years and resigns afterward, then he gets a full end of service benefits. Salary percentage for calculating gratuity if such employees include the full wage of the employee.

Gratuity for Employment Contract Termination in KSA

Employers can also terminate the employee for a valid reason. If the termination is found to be arbitrary, then employers have to compensate the affected employees as per the labor law. In case employees are not satisfied with an employee’s service or they fail to follow the workplace rules, then the employer can terminate the employment contracts on legal grounds. Gratuity in such cases is calculated as

  • If the employer terminates the contract of any employee who has served the company for less than 5 years, than the gratuity is calculated by considering half salary of the employee
  • If the employee is terminated from his job who has been providing services for more than 5 years, then his end of service benefit would be calculated by including his full monthly salary. 

End of Service Benefits for Working Women

  • If a woman has got married and she hands over the resignation letter to the employer within six months after her marriage then she is entitled to full gratuity payments. 
  • If a woman resigns when her newborn baby is less than 3 months of age, then she is eligible to get complete rewards of end of service benefits from the employer. 

Employers must pay off the gratuity to employees so that they can take a deep breath to plan for other sources of income. Gratuity is not a favor from the company to the leaving workers. However, it is the right of an employee who has worked hard for the growth of the firm. They deserve getting a fine sum of money which is calculated accordingly to their monthly salary to keep their expanse chart free of debt.

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