Reaching the 10-year milestone with an employer in Saudi Arabia is a significant achievement. It reflects years of dedication and experience. At this stage, one important financial benefit comes into focus—your End-of-Service Benefit (EOSB), commonly known as gratuity.
After a decade of service, the gratuity calculation changes in your favor, especially if you plan to resign. But what exactly should you expect? This guide explains how gratuity works after 10 years, helping you understand your rights and how to claim your full benefit.
What is End-of-Service Gratuity?
End-of-Service Benefit (EOSB) is a mandatory payment under Saudi labor law. It serves as:
- A financial reward for your service.
- A legal entitlement when your employment ends.
- A support fund to help during career transitions.
The amount you receive depends on your years of service and final salary (including basic pay and contractual allowances like housing or transportation).
How Gratuity is Calculated in Saudi Arabia
Saudi labor law (Article 84) outlines a standard formula for gratuity calculation:
Expat Gratuity Rights in Saudi Arabia: Resignation vs. Termination
- First 5 years: You get half a month’s wage for each year.
- After 5 years: You get one full month’s wage for each additional year.
Example (Termination Before 10 Years)
Aisha worked for 8 years and had a final salary of SAR 10,000. If her employer terminated her contract:
- First 5 years: 5 × (0.5 × 10,000) = SAR 25,000
- Next 3 years: 3 × (1 × 10,000) = SAR 30,000
- Total Gratuity: SAR 55,000
The gratuity is calculated based on the final wage, including basic salary and fixed allowances (e.g., housing and transport).
The Big Change After 10 Years (Article 85)
If you resign before completing 10 years, your gratuity is reduced:
- Less than 2 years: No gratuity.
- 2 to 5 years: Only one-third of the standard amount.
- 5 to 10 years: Only two-thirds of the standard amount.
What Happens After 10 Years?
Once you cross 10 years, the reduction no longer applies. Whether you resign or are terminated, you are entitled to the full gratuity calculated under Article 84.
This means no penalties for resigning after a decade of service. The law recognizes your loyalty and ensures you receive the complete benefit.
Gratuity Calculation After 10+ Years
If you have 10 or more years of service, your gratuity follows this formula:
- First 5 years: Half a month’s wage per year.
- After 5 years: One full month’s wage per year.
Example 1 (Resignation After 12 Years)
Mohammed resigns after 12 years of service. His final salary is SAR 15,000.
- First 5 years: 5 × (0.5 × 15,000) = SAR 37,500
- Next 7 years: 7 × (1 × 15,000) = SAR 105,000
- Total Gratuity: SAR 142,500
Since he completed 10+ years, he gets the full amount despite resigning.
Example 2 (Termination After 15 Years)
Layla’s employer terminates her contract after 15 years. Her final salary is SAR 18,000.
- First 5 years: 5 × (0.5 × 18,000) = SAR 45,000
- Next 10 years: 10 × (1 × 18,000) = SAR 180,000
- Total Gratuity: SAR 225,000
Does a Partial Year Count?
Yes. If you have completed 10 years and a few extra months, your gratuity includes that partial year.
For example, if you worked 10 years and 6 months, you get:
- 10 years of full gratuity, plus
- 6/12 of one full month’s salary for the extra 6 months.
How to Claim Your Gratuity
Understanding your entitlement is important, but how do you actually receive your gratuity?
Step 1: Notice Period
- If resigning, submit your notice as per contract terms.
- If terminated, expect an official termination notice.
Step 2: Employer’s Calculation
Your HR department will calculate your final settlement, including gratuity.
Step 3: Review the Calculation
Before signing any documents:
✅ Check start and end dates of service.
✅ Ensure final wage includes agreed allowances.
✅ Verify the gratuity formula matches Article 84.
✅ Look for deductions (should only be valid reasons like unpaid loans).
Step 4: Signing the Settlement
Only sign the final settlement document if everything is correct.
Step 5: Receiving Payment
- Resigned? Payment is due within 7 days.
- Terminated? Payment is due within 14 days.
- Ensure your employer has the correct bank details.
Key Considerations for Long-Term Employees
- Verify Your Numbers: EOSB after 10+ years is a large amount, so double-check calculations.
- Article 80 Exception: If terminated for serious misconduct, you may lose gratuity.
- Check Your Contract: Some allowances may not be included in your gratuity calculation.
FAQs
1. What happens if I resign before 10 years?
Your gratuity is reduced:
- 2–5 years: You get only one-third.
- 5–10 years: You get only two-thirds.
2. Can my employer refuse to pay gratuity?
No. EOSB is mandatory under Saudi labor law. If an employer refuses, you can file a complaint with the labor office.
3. Do I need to work the full 10th year?
Yes. You must complete 10 full years to receive the full benefit.
4. Are bonuses included in gratuity?
No. Only basic salary and fixed allowances (like housing and transport) are included.
5. How do I calculate gratuity for a partial year?
Use a pro-rata formula:
(Months worked ÷ 12) × One full month’s wage.
Final Thoughts
If you have worked 10+ years in Saudi Arabia, you are entitled to full gratuity under Article 84. Whether you resign or are terminated, you receive a half-month’s salary per year for the first 5 years and one full month’s salary per year after that.
Before leaving your job, double-check your final settlement, ensure all calculations are correct, and expect your payment within the legally required timeframe.
Your gratuity is a well-earned reward for your long-term dedication—make sure you receive what you deserve.
