Saudi End-of-Service Benefit 2026: The Complete ESB Guide
Saudi Arabia's end-of-service benefit rewards service in two rate bands — but resignation can sharply reduce it. Here is the full formula with real numbers.
In Saudi Arabia, the lump sum you receive when your job ends is called the end-of-service benefit (ESB), set by the Labour Law and administered through HRSD/Qiwa. How much you get depends on two things: how long you worked, and whether you resigned or were terminated.
The two rate bands
You earn:
- Half a month's wage for each of your first 5 years of service.
- A full month's wage for each year beyond 5.
The wage used is your last wage including regular allowances — not basic pay alone. That makes the Saudi base broader than the UAE's basic-only rule.
Resignation changes everything
Unlike the UAE, where resignation and termination pay the same, resigning in Saudi Arabia reduces your ESB on a sliding scale:
| Years of service (on resignation) | Share of ESB payable |
|---|---|
| Under 2 years | Nothing |
| 2 to 5 years | One-third (⅓) |
| 5 to 10 years | Two-thirds (⅔) |
| 10 years or more | The full award |
If the employer terminates you, you receive the full award regardless of tenure.
Worked example: 6 years, terminated
An employee on a SAR 8,000 wage, terminated after 6 years:
- First 5 years = 5 × ½ × 8,000 = SAR 20,000
- Year 6 = 1 × 8,000 = SAR 8,000
- ESB = SAR 28,000
Worked example: same person, but resigned
Had that same employee resigned at 6 years, the 5–10-year band applies a two-thirds multiplier:
- 28,000 × ⅔ = SAR 18,667
That is roughly SAR 9,300 less than the terminated figure — the price of resigning before you cross the 10-year line.
Worked example: a shorter tenure
On SAR 6,000 with 3 years:
- Terminated: 3 × ½ × 6,000 = SAR 9,000
- Resigned (2–5-year band, ⅓): 9,000 × ⅓ = SAR 3,000
No cap
Saudi Arabia sets no statutory ceiling on ESB — unlike the UAE's two-years'-wages cap or Kuwait's 18-month limit. Long-tenure, higher-wage staff therefore see the award keep growing.
How the award builds over a career
Because the rate steps up after five years and the resignation multiplier disappears at ten, the ESB grows unevenly with tenure. Here is a terminated employee on a SAR 10,000 wage at several service points:
| Years (terminated) | Calculation | ESB |
|---|---|---|
| 3 years | 3 × ½ × 10,000 | SAR 15,000 |
| 5 years | 5 × ½ × 10,000 | SAR 25,000 |
| 8 years | 25,000 + (3 × 10,000) | SAR 55,000 |
| 12 years | 25,000 + (7 × 10,000) | SAR 95,000 |
Notice how each year beyond five adds a full month rather than half — which is why staying past the five-year mark accelerates the award sharply.
The wage base catches people out
A common surprise is that Saudi ESB uses your last wage including regular allowances, not basic pay alone. That is broader than the UAE, Qatar and Oman, which all use basic only. If your package is heavy on allowances, your Saudi ESB base is larger than a UAE-style basic-only base would be — see basic salary vs total salary for why the base matters so much.
Calculate yours
The Saudi End-of-Service Calculator applies both rate bands and the resignation reduction for you — just enter your wage, your years, and whether you resigned or were terminated. For the statute detail, see the Saudi ESB guide. Comparing an offer with the Emirates? Read UAE gratuity vs Saudi ESB.
Frequently asked questions
How is end-of-service calculated in Saudi Arabia?
Half a month's wage for each of the first five years and a full month's wage for each year beyond five, based on your last wage including regular allowances. Resignation reduces the award unless you have 10 or more years of service.
Do I get ESB if I resign in Saudi Arabia?
Yes, but reduced by service band: nothing under 2 years, one-third for 2–5 years, two-thirds for 5–10 years, and the full amount at 10 years or more. If the employer terminates you, you receive the full award regardless.
Is Saudi ESB based on basic or total salary?
On the last wage including regular allowances, which is broader than the UAE's basic-salary-only rule.
Is there a maximum on Saudi end-of-service pay?
No. There is no statutory cap on the total ESB award.