End Of Service Calculator Ksa Labour Law

End of Service Gratuity Formula:

\[ Gratuity = Last Basic Salary \times \left(\frac{15}{30} \times Years_{\leq5} + \frac{21}{30} \times Years_{>5}\right) \]

Gratuity:

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1. What is KSA End of Service Gratuity?

The KSA End of Service Gratuity is a legal entitlement for employees in Saudi Arabia under the Labor Law. It is calculated based on the employee's last basic salary and years of service, providing financial compensation upon termination of employment.

2. How Does the Calculator Work?

The calculator uses the KSA labor law gratuity formula:

\[ Gratuity = Last Basic Salary \times \left(\frac{15}{30} \times Years_{\leq5} + \frac{21}{30} \times Years_{>5}\right) \]

Where:

\( Last Basic Salary \) — Final basic monthly salary in SAR
\( Years_{\leq5} \) — Years of service up to 5 years
\( Years_{>5} \) — Years of service beyond 5 years
\( \frac{15}{30} \) — Half month's salary for each year up to 5 years
\( \frac{21}{30} \) — Two-thirds of a month's salary for each year beyond 5 years

Explanation: The formula calculates gratuity as half month's salary for each of the first 5 years, and two-thirds of a month's salary for each additional year beyond 5 years.

3. Importance of Gratuity Calculation

Details: Accurate gratuity calculation is essential for both employers and employees to ensure compliance with Saudi labor laws and fair compensation upon employment termination.

4. Using the Calculator

Tips: Enter the last basic monthly salary in SAR and total years of service. The calculator will automatically apply the correct formula based on whether service years are 5 or less, or more than 5 years.

5. Frequently Asked Questions (FAQ)

Q1: What is included in "Last Basic Salary"?
A: Only the basic salary component is used for gratuity calculation. Allowances, bonuses, and other benefits are typically excluded.

Q2: How are partial years calculated?
A: Partial years of service are calculated proportionally based on the actual months worked.

Q3: Is gratuity payable for resignations?
A: Yes, but the calculation may differ based on the reason for termination and length of service.

Q4: What happens if employment is less than 2 years?
A: For service less than 2 years, no gratuity is payable unless specified in the employment contract.

Q5: Are there any exceptions to this calculation?
A: Certain categories of workers and specific termination circumstances may have different gratuity calculations as per Saudi labor law.