End of Service Benefits (EOSB) in Saudi Arabia

1. What is End of Service Benefit (EOSB)?

End of Service Benefit is a statutory compensation required under Saudi Labour Law. It is paid by the employer to the employee when the employment contract ends, whether due to resignation, termination, or contract completion.

EOSB is designed to protect employees financially after the end of their service and acts as a long-term employment security system.

2. Who is Eligible for EOSB?

• Saudi and non-Saudi employees
• Full-time employees
• Employees with registered employment contracts
• Employees completing minimum service period

EOSB applies to both Saudi nationals and expatriates working under Saudi Labour Law.

3. EOSB Calculation Formula

Standard Formula:

• First 5 years: Half-month salary for each year
• After 5 years: One full-month salary for each year

Example:

• Salary: 5,000 SAR
• Service: 7 years
• First 5 years = 2.5 months salary
• Next 2 years = 2 months salary
• Total = 4.5 months salary EOSB

4. EOSB After Resignation

• Less than 2 years → No EOSB
• 2 to 5 years → 1/3 of EOSB
• 5 to 10 years → 2/3 of EOSB
• More than 10 years → Full EOSB

5. EOSB After Termination

If the employer terminates the employee without valid legal reason, the employee is entitled to full EOSB regardless of service duration.

• Unlawful termination → Full EOSB
• Termination under Article 80 → EOSB may be denied
• Mutual termination → EOSB applies normally

6. Special EOSB Cases

• Death of employee → EOSB paid to legal heirs
• Work disability → Full EOSB
• Company closure → Full EOSB
• Contract expiry → EOSB applies

7. Legal Protection for Employees

EOSB is a legal right protected by Saudi Labour Law. Employers cannot waive, deny, or manipulate EOSB entitlements.

• HRSD (Ministry of Human Resources)
• Labour courts
• Najiz judicial platform