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Saudi End-of-Service Benefits Formula:
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Saudi end-of-service benefits, also known as gratuity, are financial entitlements provided to employees upon termination of their employment contract according to Saudi Labor Law. This calculation ensures fair compensation for years of service.
The calculator uses the standard Saudi gratuity formula:
Where:
Explanation: The formula calculates the daily rate from the monthly basic salary and multiplies it by the total service days to determine the final gratuity amount.
Details: Accurate gratuity calculation is essential for both employers and employees to ensure compliance with Saudi labor regulations and fair financial settlement upon employment termination.
Tips: Enter the monthly basic salary in SAR and the total number of service days. Ensure both values are positive numbers (salary > 0, service days between 1-36500).
Q1: What is included in basic salary for gratuity calculation?
A: Basic salary typically includes the fixed monthly salary excluding allowances, bonuses, and other variable components unless specified in the employment contract.
Q2: How are service days calculated?
A: Service days include all actual working days from employment start date to termination date, including approved leaves and public holidays.
Q3: Are there different calculation methods for different service periods?
A: Yes, Saudi labor law has specific calculations for less than 5 years service and more than 5 years service, with different percentages applied.
Q4: When is gratuity payable?
A: Gratuity is payable upon termination of employment contract, whether by resignation, termination, or completion of contract term.
Q5: Can gratuity be forfeited?
A: Under certain circumstances specified in Saudi labor law, such as dismissal for gross misconduct, gratuity rights may be affected.