The Saudi Labor Law establishes a crucial milestone for workers who demonstrate exceptional long-term service - the ten-year threshold.
Once an employee voluntarily resigns after completing ten or more years of continuous service, their financial entitlement mirrors that of an employee whose contract was terminated without cause by the employer.
Under Article 85, the worker becomes eligible for full (100%) End-of-Service Benefit (EOSB) entitlement, with no proportional reduction applied.
The Significance of the 10-Year Threshold (Article 85)
The EOSB framework uses tiered reductions to distinguish between voluntary resignation and involuntary termination.
Reaching the 10-year mark serves as the final loyalty milestone, after which the EOSB is fully payable.
| Resignation Tier | Service Duration | Reduction Applied |
|---|---|---|
| Tier 1 (Partial) | 2 to 5 years | ⅓ of the full award |
| Tier 2 (Increased) | 5 to 10 years | ⅔ of the full award |
| Tier 3 (Full) | 10 years or more | Zero reduction (Full Award) |
At this Final Tier, the worker receives the maximum entitlement calculated entirely under the Article 84 formula, without any reduction factors.
Full Award vs. Full Payout
The term “Full Award” means the worker receives the complete EOSB amount accrued under Article 84, calculated using progressive accrual rates:
- First Five Years: Half-month wage accrual (0.5 × Last Wage)
- Subsequent Years: Full-month wage accrual (1.0 × Last Wage)
👉 Understand the Full EOSB Calculation Guide →
Illustrative Numerical Example (12.5 Years of Service)
This example highlights that once service reaches 10 years or more, no reduction factor (neither ⅓ nor ⅔) is applied.
Scenario:
A worker resigns voluntarily after 12 years and 6 months (12.5 years) of continuous service.
Last Actual Monthly Wage (LW): SAR 15,000.
Step 1: Calculate the Total Full EOSB (Article 84 Basis)
| Service Segment | Formula | Calculation | Value (SAR) |
|---|---|---|---|
| Part A: First 5 Years (0.5× Rate) | 5 × 0.5 × 15,000 | 2.5 × 15,000 | 37,500.00 |
| Part B: Remaining 7.5 Years (1.0× Rate) | 7.5 × 1.0 × 15,000 | 7.5 × 15,000 | 112,500.00 |
| Total Full Theoretical EOSB | - | - | 150,000.00 |
Step 2: Apply Resignation Entitlement Rule (Article 85)
Since the service period is 10 years or more, the worker is entitled to the full award.
| Calculation | Formula | Result |
|---|---|---|
| Final EOSB Payment | Full Award (100%) | SAR 150,000.00 |
⚖️ Note: The Final EOSB Payment equals the Total Full Theoretical EOSB. The voluntary nature of the resignation does not reduce the entitlement beyond the ten-year mark.
Contextual Safeguards and Final Payment
Continuous Service:
Full entitlement requires continuous service of at least 10 years.
This includes official holidays, vacations, and unpaid absences not exceeding 20 intermittent days per work year.
👉 Review the Continuous Service Rules for Saudi Arabia Gratuity →Legal Exceptions:
Certain resignations before the ten-year mark also qualify for full EOSB, such as:- Resignation due to employer fault (Article 81)
- Female worker resignation within six months of marriage or three months after childbirth
👉 View the Full Guide to Saudi Arabia EOSB Resignation & Termination Entitlement →
Settlement Timeline:
Upon resignation, the employer must settle the full EOSB and all other final dues (wages, accrued leave, etc.) within 14 days from the contract’s end date.
Any unresolved disputes or questions must be formally directed to the relevant Saudi authorities for official clarification and binding decisions.
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