In short
- Full award: half a month's wage for each of the first five years, and a full month's wage for each year after that (Art. 84).
- On resignation: nothing before two years, one third from two to five, two thirds from five to ten, and the full award after ten (Art. 85).
- You keep the full award in specific cases, including force majeure and a female worker's marriage or childbirth (Art. 87), and the cases in Art. 81.
Start with the full award
The award is first calculated as if the employer had ended the contract; your share is then applied according to how the contract ended. Article 84 of the Labour Law grants half a month's wage for each of the first five years and one month's wage for each later year, based on the last wage. Parts of a year count pro rata.
Your share on resignation
- Less than two consecutive years: no award.
- Two to five years: one third of the award.
- More than five and up to ten years: two thirds.
- Ten years or more: the full award.
These fractions come from Article 85 and apply to resignation only. When a fixed-term contract simply expires, or the employer ends the contract outside the cases in Article 80, the full award is due.
A worked example
An employee whose last wage is SAR 10,000 resigns after seven years. Full award: five years at half a month = SAR 25,000, plus two years at one month = SAR 20,000, total SAR 45,000. With service between five and ten years, the employee receives two thirds: SAR 30,000.
When do you get the full award even though you left?
- You left because of force majeure beyond your control (Art. 87).
- A female worker ends her contract within six months of her marriage or three months of giving birth (Art. 87).
- You left in one of the cases where the law lets a worker leave and keep all rights, such as the employer's breach of its essential obligations or an assault on the worker, as set out in Article 81.
Proving an Article 81 case needs evidence: messages, payslips, earlier complaints. Collect it before you leave, not after.
When is nothing due?
If the contract is terminated under one of the cases in Article 80, which cover specific serious misconduct by the worker, no award is due. Many disputes are about whether Article 80 really applies, so do not accept that label before a lawyer has reviewed it.
Deadlines to keep
- The employer must settle your dues within one week if it ended the relationship, and within two weeks if you ended it (Art. 88).
- Labour claims are not heard after twelve months from the end of the employment relationship (Art. 222).
- Do not sign a final settlement before you have checked the figures.
Want to check your dues before you resign or sign a settlement?
Send us a short summary of your situation, and we will tell you the options and expected cost before you commit to anything.
The law sets a minimum. If your contract or the company's rules give you more, you are entitled to the better terms. We recheck article numbers after every amendment to the Labour Law.
Content on this website is provided for general information only and does not constitute legal advice. Contact us for advice on your specific situation.