End of Service Gratuity (EOSB) is a key financial benefit for expats working in Saudi Arabia. It provides a lump sum when employment ends, ensuring financial security. But what happens if you’ve taken unpaid leave or had unauthorized absences? This guide explains how Saudi labor laws impact your gratuity when you take time off without pay.
Saudi Gratuity After 10 Years of Service: What to Expect
Quick Recap: How EOSB is Calculated
Employees who complete at least two years with the same employer are entitled to gratuity. The calculation is based on your last salary, including allowances:
- First 5 years – Half a month’s salary per year of service
- After 5 years – One month’s salary per year of service
(EOSB calculation guide here.)
Types of Leave Under Saudi Labor Law
Saudi labor law allows different types of leave, some of which are paid, while others may affect your gratuity.
- Annual Leave: Paid leave based on your contract and Article 109 of the Saudi Labor Law.
- Sick Leave: Paid leave depending on medical certification. Article 117 specifies pay reductions based on duration.
- Marriage Leave & Bereavement Leave: Paid leave for major life events; check company policy for details.
- Maternity Leave: Paid leave for female employees under Article 151.
- Hajj Leave: Paid leave for Muslim employees to perform Hajj, granted once during employment.
Authorized vs. Unauthorized Absences
- Authorized absences – Approved by your employer (e.g., pre-approved vacation, sick leave with medical proof).
- Unauthorized absences – Time off without permission, which can lead to warnings, salary deductions, or even termination.
Employers must maintain records of leave and absences to comply with Saudi labor laws.
Expat Gratuity Rights in Saudi Arabia: Resignation vs. Termination
How Unpaid Leave Affects EOSB Calculation
Unpaid leave is any leave taken beyond your statutory entitlements. Extended unpaid leave may reduce your EOSB by affecting your continuous service calculation.
Example Scenario
You worked for 6 years but took 6 months of unpaid leave. If your employer considers this a break in service, your EOSB may be calculated for 5.5 years instead of 6.
Example Calculation (Salary: SAR 10,000)
- Without unpaid leave: (5 × 0.5 × 10,000) + (1 × 1 × 10,000) = SAR 35,000
- With 6 months unpaid leave: (5 × 0.5 × 10,000) + (0.5 × 1 × 10,000) = SAR 30,000
Key Considerations
- Written Agreement: Always get written confirmation from your employer stating whether unpaid leave affects your gratuity.
- Company Policy: Some companies count unpaid leave as part of continuous service, while others don’t.
- Legal Advice: If unsure, consult the Ministry of Human Resources and Social Development (MHRSD).
Impact of Unauthorized Absences on EOSB
If you take frequent unapproved absences, your employer may deduct days from your service period or, in extreme cases, terminate you without gratuity under Article 80 of Saudi Labor Law.
Termination Due to Excessive Absences
Article 80 states that an employer can dismiss a worker without EOSB if they:
- Are absent for more than 30 days in a year without valid reason.
- Are absent for 15 consecutive days without prior approval.
Example Scenario
Fatima was frequently absent without medical proof. After repeated warnings, her employer terminated her under Article 80. She lost her right to EOSB due to “termination for cause.”
How to Protect Your EOSB
- Get Written Approval for Unpaid Leave: Ensure that it explicitly states how it affects gratuity.
- Keep Records of All Leave: Maintain copies of approvals, medical certificates, and emails.
- Understand Your Company’s Leave Policy: Every company has its own rules; be aware of them.
- Stay Informed About Saudi Labor Law: Regularly check updates from MHRSD.
- Consult HR or Legal Experts for Clarity: If unsure, seek professional advice.
Employer Responsibilities
Saudi employers must:
- Grant employees their entitled leave.
- Keep accurate records of absences.
- Communicate how unpaid leave affects EOSB.
- Ensure termination decisions follow Saudi labor law.
HR consultants can help businesses stay compliant and avoid legal disputes.
Resources for Employees
- MHRSD Website
- Saudi Labor Law
- Company HR Department – Your best source for internal policies.
Conclusion
Unpaid leave and absences can impact your gratuity in Saudi Arabia. Understanding labor laws, keeping proper records, and ensuring clear agreements with your employer can help protect your EOSB. If in doubt, consult HR or legal professionals for guidance.
