End Of Service Saudi

In Saudi Arabia, End of Service (EOS) benefits under the Saudi Labour Law (Royal Decree M/51) entitle employees to a lump-sum payment upon contract termination, excluding cases of gross misconduct. For UAE/GCC tenants or business owners reviewing contracts, EOS clauses often mirror these, with payments calculated as half a month's salary per year for the first five years, and full month's salary thereafter, based on the last wage. Fixed-term contracts may specify earlier payouts, but Saudi rules cap at two years' salary maximum. This frames key entitlements without ambiguity, helping you assess fairness in cross-GCC agreements.

Calculate Saudi EOS Entitlements Precisely

Under Saudi Labour Law Article 84, EOS gratuity for indefinite contracts is 15 days' basic salary per year for the first five years, then one full month's basic salary per subsequent year, prorated for partial service. For example, an employee with 7 years at SAR 10,000 monthly basic wage receives (5 years x 15/26 x 10,000) + (2 years x 10,000) = SAR 28,846. Fixed-term contracts under Article 75 provide full contract value if terminated early without cause, but exclude housing allowances from calculations per Ministry of Human Resources guidelines. In UAE contexts, Federal Decree-Law No. 33 of 2021 aligns closely, mandating similar half-month per year for first five, full thereafter, up to two years' cap. RERA-registered tenancy contracts in Dubai may reference these for expat staff, ensuring no deductions for standard resignations after two years. Verify clause wording against these statutes to confirm alignment.

Common EOS Clause Pitfalls Exposed

Saudi contracts often misuse 'no EOS if resigned within two years' clauses, but Article 80 mandates payment regardless for service over one year, barring summary dismissal under Article 77 for theft or absenteeism. Watch for vague 'end of service date' definitions that delay payouts beyond 14 days post-termination, violating Royal Decree requirements. In GCC cross-border deals, UAE firms hiring Saudis must note Federal Decree-Law No. 33 Article 51, which prohibits waiving EOS via non-compete clauses. Examples include real estate tenants facing RERA Law No. 26 of 2007 penalties if EOS ignores 21-day notice periods. Warnings: Inflation adjustments aren't automatic; base on contract signing wage, not hikes. For Saudi Vision 2030 alignments, Qiwa platform mandates digital EOS filings, with fines up to SAR 100,000 for non-compliance. Scrutinise addendums for hidden caps below legal minimums to prevent disputes at Ministry arbitration.

Key Points

• • Saudi Article 84: Half-month salary per first five years' service.
• • Full month's basic wage per year after five years, prorated monthly.
• • UAE Federal Decree-Law No. 33: Mirrors Saudi with two-year maximum cap.
• • RERA No. 26: Tenancy EOS excludes if mutual early termination agreed.
• • Upload to TenderScan for instant EOS clause validation against GCC laws.