End Of Service Benefits Calculator Saudi Arabia

End of Service Gratuity Formula:

\[ Benefit = \frac{Basic\ Salary}{30} \times Days \times \begin{cases} \frac{1}{2} & \text{for first 5 years} \\ 1 & \text{thereafter} \end{cases} \]

Benefit (SAR):

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1. What Is End Of Service Benefits?

End of Service Benefits, also known as end of service gratuity, is a statutory payment owed to employees in Saudi Arabia upon termination of employment. It is calculated based on the employee's final basic salary and length of service.

2. How Does The Calculator Work?

The calculator uses the Saudi labor law formula:

\[ Benefit = \frac{Basic\ Salary}{30} \times Days \times \begin{cases} \frac{1}{2} & \text{for first 5 years} \\ 1 & \text{thereafter} \end{cases} \]

Where:

\( Basic\ Salary \) — Monthly basic salary in Saudi Riyals
\( Days \) — Total days of service to be compensated
\( \frac{1}{2} \) — Multiplier for first 5 years of service
\( 1 \) — Multiplier for service beyond 5 years

Explanation: The calculation converts monthly salary to daily rate, then multiplies by service days with appropriate multiplier based on tenure.

3. Importance Of End Of Service Calculation

Details: Accurate calculation of end of service benefits is crucial for both employers and employees to ensure compliance with Saudi labor law and fair compensation upon employment termination.

4. Using The Calculator

Tips: Enter basic monthly salary in SAR, total days of service to be compensated, and years of service. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is included in basic salary for calculation?
A: Basic salary typically includes the fixed monthly wage excluding allowances, bonuses, and other variable components.

Q2: How are service years calculated?
A: Service years are calculated from the employment start date to termination date, including fractions of years.

Q3: What happens if employment is less than 2 years?
A: For service less than 2 years, no end of service benefit is payable under Saudi labor law.

Q4: Are there different rules for resignation vs termination?
A: Yes, the calculation may vary depending on whether employment ends by resignation or employer termination.

Q5: Is this calculation applicable to all employees in Saudi Arabia?
A: This applies to private sector employees under Saudi labor law. Government employees and certain categories may have different schemes.