The basic entitlement
Article 84 of the Saudi Labour Law gives a worker whose contract ends half a month's wage for each of the first five years and a full month's wage for each year after, calculated on the last wage and pro rata for part years. Eight years on SAR 12,000 = 5 × 6,000 + 3 × 12,000 = SAR 66,000.
What "wage" means
Unlike the UAE, the Saudi calculation uses the actual wage: basic salary plus housing allowance and other fixed, regular allowances. Commissions and variable bonuses are generally excluded unless they are regular and contractual. Housing provided in kind is valued at two months' basic a year in GOSI practice; check your contract.
Resignation reductions
Article 85 applies when the worker resigns from an open-ended contract: nothing under two years' service; one-third of the award between two and five years; two-thirds between five and ten; the full award after ten. An eight-year resignation on the example above pays SAR 44,000 instead of 66,000.
Full award despite resigning
Article 87 preserves the full award when the resignation is due to force majeure, or when a female worker resigns within six months of marriage or three months of childbirth. Article 81 lets a worker leave without notice and with full entitlements if the employer fails to pay wages, commits fraud, assaults the worker or assigns work materially different from the contract.
Fixed-term contracts
If a fixed-term contract expires or the employer terminates it, the full award is due. Resigning before the term ends is treated under the Article 85 reductions, and the worker may owe notice compensation.
Final settlement checklist
End-of-service award, unpaid salary, accrued leave (21 or 30 days a year), notice pay if not served, and the return ticket for expatriates. Settlement is due within one week of contract end (two weeks if the worker resigned). Disputes go to the Labour Office via the Musaned/Qiwa platform, then the labour court.