End of Service benefits in Saudi according to Saudi Labor law is if the company gives a final exit or terminates and employee contract then as per Saudi Labor Law you’re entitled to get half of your monthly for first 5 year and 1 month salary for following years:

Note: For End of Service (EOS) Entitlement Employee must work for 2 years minimum if any one resign before two years and serve one month notice so he will only get his entitled leaves and salary NO EOS.

End of Service (EOS) benefits all depends on the time period an employee works in a company and based on that he will be awarded cash benefits towards ending his services from the company.

Eligibility for End of Service Benefits

To be eligible for EOSB, an expatriate must have completed a minimum of one year of service with their employer. The benefits are calculated based on the employee’s basic salary, length of service, and the date of termination of the contract. It is important to note that the eligibility criteria may vary based on the expatriate’s nationality, the type of visa held, and the conditions specified in their employment contract.

End of Service Benefits in Saudi

Employees leave the company in two situations, either they will resign or will get terminated from the company. EOS benefits will applicable in both the situation as follows:

In Case of Resignation:

Scenario 1:

As per the Article 85 of Saudi Labor Law, If an employee resigns in less than 2 years of work then he will not be entitled for End of Service (EOS) benefits.
To get these benefits he should have to complete minimum 2 years of employment.

Scenario 2:

As per the Article 85 of Saudi Labor Law, If an employee stays and works in the company for more than 2 years and less than 5 years. He will be entitles to
get 1/3rd of his EOS benefits. EOS Benefits will be half of his Salary in this case.

Scenario 3:

If an Employee complete 5 years in a company then he will be entitled to get 2/3rd of his End of Service Benefits
along with Full Salary %

Scenario 4:

If an Employee complete his 1o years of service and then resigns, he will be entitled for Full End of Service
Benefits Awards with % of Full Salary

Calculate Your End of Service Benefits Now!

In Case of Termination:

Scenario 1:

If an Employee gets terminated by his employer or company before 5 years of his service then he will be entitles for Half Salary

Scenario 2:

If an Employee get terminated after completion of 5 years, then he will be entitled for Full Salary

Women Employees in Saudi Arabia:

• If a Female employee resigns from a Job in Saudi Arabia within 6 months of her marraige, she will be eligible for End of Service Benefits
• If a Female Employee resigns after 3 months of giving birth, then also she will be eligible for End of Service Benefits

Labor Education of Saudi Arabia has also provided a Calculator where you can submit the details to get the estimated amount of End of Service benefits in KSA

Type of Contract:

– Select Type of Contract “Fixed Time” or “Unlimited Period“
– Select the End of Service Reason from the drop-down

For “Fixed Time”, select any End of Service Reason from the drop-down:

• Expiration of contract terms, or the parties have agreed to terminate the contract
• Termination of the contract by Employer
• Termination of the contract by the employer for one of the terms and conditions stated in Article (80).
• Leaving work as a result of force majeure
• The worker terminates the labor contract within six months into the marriage contract or three months into birth
• The worker leaves work for one of the conditions stated in Article (81)
• Termination of the contract by the worker or has quit the work for other reasons not stated in Article (81).

For “Unlimited Period”, select any End of Service Reason from the drop-down:

• The Worker and Employer agree to terminate the contract
• Termination of the contract by the employer
• Termination of the contract by the employer for one of the terms and conditions stated in Article (80)
• Leaving work as a result of force majeure
• The worker terminates the labor contract within six months into the marriage contract or three months into birth
• The worker leaves work for one of the conditions stated in Article (81)
• The worker leaves work without submitting his/her resignation, other than the conditions stated in Article (81)
• The resignation of a worker

Enter You Basic Salary

Enter Duration of Service in Years, You can also Enter duration in month or days (optional)

Click on the Green ‘=’ button to get the End of Service Amount

Taxation of End of Service Benefits

EOSB received by expatriates is subject to tax in Saudi Arabia. The tax rate depends on the expatriate’s nationality and the conditions specified in their employment contract. It is important to seek professional advice from a tax expert to understand the tax implications of EOSB.

End of Service Benefits is an important aspect for expatriates to understand and plan for their future financial stability. It is calculated based on the employee’s basic salary and length of service, and must be paid by the employer within two weeks of the employee’s last working day. EOSB is subject to tax in Saudi Arabia, and it is important to seek professional advice from a tax expert to understand the tax implications.

If you feel this article is helpful, please share it with your family & friends living in Saudi Arabia and looking forward for Full End of Service benefits

The Ministry of Saudi Arabia have asked Saudi citizens and foreigners who live in Saudi Arabia to use the unified application to report any violations of the Saudi Labor Law.

MHRSD: Delay in Salary will violate Saudi Labor Law

In response to a question from a citizen, the HR Ministry explained that delaying monthly salaries could take until the 10th of the month. This made the citizen wonder about the inspection campaigns of such businesses. See also: A worker can file a complaint if the salary doesn’t match what was agreed upon in the job contract.

• Earlier, the Ministry said that every company should do an evaluation of itself in January of each year. The ministry talked about how important self-evaluation is because it helps companies figure out if they are following the rules and regulations and how to fix their own mistakes.
  
• Self-evaluation is also a requirement for using electronic services from the Ministry of Human Resources.

• The MHRSD asked all giant, large, and medium-sized companies to sign up for the self-evaluation programme and do the evaluation online through the Ministry website. To change a work contract in Qiwa, both the employer and the worker must agree to the change.
  
• The Ministry also made it clear that if a company’s self-evaluation results weren’t good, they wouldn’t have to pay any money because of it.

Delays in Salary in any Company means Violation of Saudi Labor Law

Do Not Hold Iqama/Passport/Health Cards

• Employers in Saudi Arabia will not be allowed to keep employees (Expatriates) Iqama, Health Cards, Passports as reported by Saudi Local media

Extension of Fine Payment for Companies

• For any Company violations, companies will have to correct their violations within 10 days of time period instead of 30 days and all the fines must be paid within a time period of 60 days instead of 15 days.

If any company is fails to pay the fine to fix the issue in time, The Ministry of Labor & Social Development can also suspend its services

No End of Service Benefits

As per the new changes in Saudi Labor Law 2019 an employee can be fired without even receiving his End of Service Benefits (ESB) in the following conditions:

Read More: Know Your End of Service Benefits in Saudi

• Any worker who is absent to work for more than 15 days long leave at a stretch or who will take a total of 30 days of absense in a year
• Any worker who physically attacks his colleague at work place or even exchanges harsh words with his superior or manager verbally or over electronic media (E-mail, Telephone or Physically)

For the above two conditions are imposed on any employee he will not recieve his End of Service benefits in Saudi Arabia

MOL in Saudi wants every company to abide by the laws from the Saudi government so that there is a fair chance of competition between companies. All the companies running in the kingdom need to correct their activities and status within 4 weeks of time and should inform the Ministry.

Here are the following things companies need to check

– If A company has license to operate in the given region/area
– If A Company has correct Nitaqat Status
– If A Company is hiring correct no of Expats and Saudi Nationals &
– If A company is violating any Saudi Laws

All the above needs to be checked and corrected inorder to renew Company License or Issung New Iqama or Visas to staff.

Its important that all these things must be done in the given 4 weeks after which the Mnistry will conduct field inpections to check.

Employer and employee relations in Saudi Arabia are regulated by the labor laws which look after the interest of both the parties.

The Government of Saudi Arabia provides equal opportunities to its citizen as well expats to develop the country. This maintains a healthy and sustainable work system; the government employs labour laws to make sure workers from private companies are given their rights, as per the Islamic Shariah.  This article is directed to give expatriates a better understanding of the labour laws in the country.

It always makes sense to read about the country before landing on its soil to better equip yourself with the information you will need to easily navigate around the country mainly with respect to the laws.

Primarily, the labour law in Saudi Arabia makes sure that both Saudi and non-Saudi workers are given fair and equal treatment without and discriminations towards their religion.

Labour law clearly asks the expats to follow the below points to have a memorable stay in the country:

• Expatriates should completely understand the contract with their employees before concluding it.
• Contact agreement should be abided by both parties
• Punctuality on the job should be maintained
• Expats can change their job if they have met and fulfilled the official procedures.
• The organization/firm/company/government body should pay the wages in accordance to the contract.
• In case of any misunderstanding with the colleague or hindrance faced in the work area and fail to settle.
• The legal visa procedures should be carefully handled or will be punishable under the law.
• An Employee’s medical expenses should be barred by the company according to the work organization regulation approved by the ministry of labour law
• The Employees should be provided with absolute social insurance based on the Occupational Hazards Branch which is a social law.
• For Employees who have completed 5 years of service, the annual leave is increased from 15 to 21 days and 30 days.
• The Employee shall be honored with an end of service award and his last wage shall be calculated.

In this aspect, the ministry has been called upon to pay wages on time and grant them regular leaves. It is not only the fault of the employers to exploit but also of the working class that they get exploited by not knowing their rights under Saudi Labor Law.

A number of changes have been made. We set out below a summary of some of the key areas that have undergone amendments:

Probationary periods

The probationary period can now be extended up to 180 days. An employee however may not be placed on probation more than once by the same employer, unless the employee is placed in a new position or was not engaged by the same employer in the last six months.

Relocation

The employee’s written consent is required before any geographic relocation which would entail the relocation of the employee’s place of residence. Temporary relocations of up to 30 days per annum are permitted however.

Notice periods

Open-ended contracts are now subject to 60 days’ termination notice for employees who are engaged and paid on a monthly basis. A minimum of 30 days’ is required for those engaged on other terms.

Leave

Employees serving their notice periods are now entitled to eight fully paid hours per week or a full day per week to look for alternative employment.

Compensation

Unless the parties agree in advance and in writing on the amount of compensation payable upon termination without “valid reason”, the party terminating the contract will have to compensate the other with either:

• A wage equivalent to 15 days for each completed year of employment, in indefinite term contracts.
• The balance of wages for the remaining employment term, in the fixed-term contract.

In each case, the minimum amount of compensation may not be less than two months’ wages.

Unauthorised leave

Employers may terminate the employee’s contract without compensation in the event the employee is absent from work “without a valid reason” for either:

• More than 30 non-consecutive days a year.
• For more than 15 consecutive days within a year.

In the first case, a prior written warning must be delivered to the employee after 20 days of non-consecutive absence and in the second case the warning must be delivered after 10 days of consecutive absence.

Renewability

Fixed term contracts that are renewed more than three times (or upon the employee accruing four years of continuous service, whichever comes sooner) will automatically convert into indefinite term contracts.

References and sanctions

Departing employees have the right to request upon termination a service certificate setting out details of their employment. The employers are prohibited from giving negative references which could hinder the employee’s chances of securing alternative employment.

Employers are also required to maintain written records of any fines imposed on their employees. The information required includes the worker’s name, their remuneration, the date, the reason for and the amount of the fine imposed.

Leave

A number of amendments increasing short-term leave have been introduced.

• Maternity leave: female workers are now entitled to 10 weeks’ maternity leave fully paid, to commence maximum four weeks before the expected date of delivery. The leave can also be extended for an additional month on an unpaid basis.
• Marriage and bereavement leave: leave due to marriage or death of an immediate family member has been increased from three to five days.
• Paternity leave: leave has been increased from one to three days.

Training requirements

An employer with more than 50 employees is required to provide training to at least 12% of its total number of Saudi Arabian employees. Employer must be able to provide documentary evidence of the training.

Working hours

Employees’ daily working hour limit has been increased from 11 to 12 hours provided that the employees do not work for more than five consecutive hours.

Company policies and employment contracts

All companies are now required to establish written internal by-laws as per the standard form applied by the Ministry of Labor. Companies are also required to follow the form of employment contract prepared by the Ministry of Labor.

Work injuries

Employers must provide financial aid to employees temporarily unable to work due to injuries suffered at work at the rate of 75% of the employees’ wage. In the event of non-recovery, the employer will need to compensate the employee for such injury.

Enforcement

The Ministry of Labor inspectors are no longer authorised to close businesses “on the spot”. All potential violations must be reviewed by the Ministry of Labor.

Depending on its severity, any violation of the law may be subject to monetary fines or business suspension or closure.

Finally, the new amendments provide the Minister of Labor with a discretionary right to grant a financial reward of up to 25% of the total amount of collected penalties against any information that assists inspectors or others in revealing violations of the Labor Law.

Conclusion

As well as a general increase in rights of employees, the amendments were intended to narrow the gap between employment in the private and public sectors. An increase in Saudization and rights of employers to manage employees, particularly when dealing with employment termination, have been well received.

It remains to be seen as to how the Ministry of Labor will enforce these new laws and carry out its terms in practice, however the transparency these amendments provide to both employees and employers no doubt offer a better foundation for working relationships going forward.