Saudi Labour Law and End of Service — Articles 84, 85, 87, 88 and 80 Explained

Your end of service award in Saudi Arabia is not set by your employer's goodwill or by company policy — it is set by the Saudi Labour Law (Royal Decree No. M/51). Five articles do almost all of the work, and knowing which article does what is the difference between accepting whatever figure you are handed and checking it for yourself.

This guide explains each one in plain English, with a worked illustration so you can see the rule in action:

• Article 84 — how the award accrues (the rate per year of service).
• Article 85 — how resigning reduces the award, and the force-majeure exception that protects it.
• Article 87 — the full award for a woman who resigns after marriage or childbirth.
• Article 88 — how soon your employer must pay.
• Article 80 — the narrow list of misconduct that can cost you the award entirely.

One distinction matters before anything else: Article 84 sets the gross figure; Article 85 decides what fraction of it you actually receive if you resigned. These are two separate articles doing two separate jobs. The accrual rate is never reduced because you resigned — what the resignation rule reduces is the final award after the rate has been applied. Mixing the two up is the single most common mistake people make when reading their settlement.

To put any of these rules to work on your own numbers, use our KSA EOSB Calculator, which applies Article 84 and Article 85 as separate, visible steps.

Article 84 is the engine of the whole calculation. It sets a two-tier rate based on your length of service, applied to your last actual wage:

• Half a month's wage for each of the first 5 years of service.
• One full month's wage for each year of service after the fifth.
• Any partial year is counted pro-rata — a part-year is not rounded away.

The "wage" used is your last actual wage, which in Saudi Arabia is read to include your basic pay plus your fixed, regular monthly allowances (housing, transport and similar) — not basic salary on its own. This is a crucial difference from the UAE, where gratuity is calculated on basic salary only. Variable pay such as overtime, commission and one-off bonuses is excluded.

There is no cap on the total award in Saudi Arabia, and the rate is calculated on your final wage, not an average of your career — so a pay rise shortly before you leave lifts the whole figure.

Worked illustration — Article 84

An employee leaves after exactly 8 years on a last total monthly wage of SAR 10,000:

• First 5 years at half a month: 5 × 0.5 × SAR 10,000 = SAR 25,000
• Years 6, 7 and 8 at one month: 3 × 1.0 × SAR 10,000 = SAR 30,000
• Gross award under Article 84 = SAR 55,000

That SAR 55,000 is the starting figure. Whether the employee receives all of it depends on how the job ended — which is where Article 85 comes in.

Article 85 applies only when you resign. If you are terminated, your contract expires, or you and your employer part by mutual agreement, Article 85 does not touch your award — you receive the full Article 84 figure. But when you resign, the law reduces the award on a sliding scale tied to your years of service:

These tiers are Article 85, not Article 84. Article 84 fixed the gross figure; Article 85 multiplies it by the fraction in the table above. The two articles work in sequence.

The force-majeure exception

Article 85 also protects you in one important situation: if you leave your job because of a force majeure beyond your control, you receive the full award regardless of the tier you would otherwise fall into. This covers circumstances that make continuing impossible through no fault of your own, rather than an ordinary voluntary resignation.

Worked illustration — Article 85

Take the same employee from the Article 84 example — 8 years of service, gross award SAR 55,000 — but now they resigned:

• 8 years falls in the 5-to-less-than-10-year tier → 2/3 of the award
• Final award = SAR 55,000 × 2/3 = SAR 36,667

Resigning at 8 years rather than being terminated costs this person roughly SAR 18,333. Had they instead resigned at 10 years or more, the reduction would vanish entirely. That tipping point is exactly the kind of decision our guide to the KSA resignation reduction rule is built around.

Article 87 gives a female employee an exception to the Article 85 resignation reductions. A woman who resigns receives the full award — with no tier reduction at all — if she resigns:

• within 6 months of her marriage, or
• within 3 months of giving birth.

Length of service does not change this. The protection applies even where the standard resignation rule would have reduced the award — or paid nothing at all for service under two years.

Worked illustration — Article 87

A female employee has worked 3 years on SAR 8,000 a month and resigns two months after her wedding.

• Article 84 gross: 3 × 0.5 × SAR 8,000 = SAR 12,000
• Ordinary resignation at 3 years would apply the Article 85 2-to-5-year tier → 1/3 → SAR 4,000
• But she resigned within 6 months of marriage, so Article 87 applies → full SAR 12,000

To rely on this in practice, resign in writing, state the reason (marriage or childbirth), attach the marriage or birth certificate, and confirm the date falls inside the 6-month or 3-month window. Keep copies in case of any dispute.

Article 88 sets the deadline for paying your wages and settling your entitlements — including your end of service award — once the employment relationship ends. The deadline depends on who ended the contract:

• Where the employer ends the contract (or it simply expires), the employer must pay within a maximum of one week from the date employment ends.
• Where the worker ends the contract (resignation), the employer must settle all entitlements within a period not exceeding two weeks.

This is the precise position under Article 88. You will sometimes see a flat "7 days" quoted — that is the termination case; the two-week limit is the figure that applies when you are the one resigning. Either way, once that window passes without payment, your employer is in breach, and a labour complaint becomes the appropriate next step.

Worked illustration — Article 88

You resign and your last working day is 1 March. Because you ended the contract, your employer has up to two weeks — until around 15 March — to pay your final wages and end of service award. If your employer had terminated you on the same date, the deadline would have been one week, around 8 March.

If the deadline passes unpaid, gather your evidence and follow the steps in our guide to claiming your EOSB in KSA.

Article 80 is the one article that can cost you the award completely. It lists the specific cases of serious misconduct in which an employer may dismiss an employee without notice and without the end of service award. The list is narrow and includes, among the recognised grounds:

• assaulting the employer, the manager, or a colleague during or because of work;
• failing to perform essential contractual duties, or disobeying lawful instructions, despite written warnings;
• committing a dishonest act or one involving moral turpitude;
• deliberately causing material loss to the employer (or concealing it);
• using forgery to obtain the job;
• being absent without a valid reason for more than the set limits (broadly, beyond 30 days in a year or beyond a continuous run of days);
• disclosing the employer's confidential or industrial secrets.

Two safeguards matter here. First, the grounds are limited to what the law lists — an employer cannot invent a reason to avoid paying. Second, the burden of proof is on the employer: if your employer claims Article 80 misconduct to deny your award, they must prove it, not you. A bare assertion of "misconduct" on a settlement is not enough.

Worked illustration — Article 80

An employee with 6 years of service is dismissed and told they will receive no award "for misconduct," but the employer produces no warnings, no investigation and no evidence. Because Article 80 requires the employer to prove a listed ground, the assertion alone does not stand — and the employee's Article 84 award (here, a full award, since this is a termination rather than a resignation) remains due. The right response is to dispute it rather than accept the zero figure.

If you are facing an Article 80 claim, document everything and check whether the employer can actually evidence a listed ground before you sign anything.

Read in sequence, the five articles tell a single story about your award:

1. Article 84 calculates the gross award from your years of service and last actual wage.
2. Article 85 reduces that figure only if you resigned — and not at all if you have 10+ years, or if you left due to force majeure.
3. Article 87 overrides the resignation reduction for a woman who resigns within 6 months of marriage or 3 months of childbirth — full award.
4. Article 88 sets the deadline to pay: one week if the employer ended it, up to two weeks if you resigned.
5. Article 80 is the only route to zero — and only for proven, listed misconduct.

If you remember nothing else, remember the split: accrual is Article 84; the resignation tiers are Article 85. Everything else is an exception or a deadline layered on top. Run your own figures against these rules in our KSA EOSB Calculator before you accept any settlement.