The Two-Thirds EOSB Rule governs the End-of-Service Benefits (EOSB) for workers who demonstrate sustained, long-term commitment to their employer before resigning.
This rule applies specifically when a worker’s continuous service exceeds five successive years but is less than ten years.
Understanding this rule requires accurately calculating the full theoretical EOSB under Article 84, and then applying the Two-Thirds (⅔) reduction outlined in Article 85.
The Foundation: Full Calculation Rate (Article 84)
Every resignation entitlement begins by determining the full theoretical EOSB amount - the total the worker would have received if terminated without cause.
This foundational calculation follows a progressive accrual structure:
- First 5 Years: Half-month wage (0.5×) for each year of service
- Subsequent Years (Year 6 onward): Full month’s wage (1.0×) for each additional year
The full award is calculated using the worker’s last wage (Actual Wage), which includes fixed allowances and increments.
👉 Understand the Full EOSB Calculation Guide →
Eligibility Criteria for the Two-Thirds Rule (Article 85)
Under Article 85, the EOSB payout upon resignation follows a tiered structure:
| Tier | Service Period | Entitlement Award |
|---|---|---|
| Tier 1 (One-Third Rule) | 2 to 5 years | ⅓ of the full award |
| Tier 2 (Two-Thirds Rule) | Exceeding 5 years, but less than 10 years | ⅔ of the full award |
| Tier 3 (Full Award Rule) | 10 years or more | 100% of the full award |
A worker qualifying for the Two-Thirds category benefits from the accelerated accrual rate (1.0×) for every year after the fifth, resulting in a substantially higher payout compared to the One-Third tier.
Detailed Numerical Example: Applying the Two-Thirds Rule
Scenario:
Mr. Ali resigns after 7 years and 6 months (7.5 years) of continuous service. This period qualifies under the Two-Thirds (⅔) entitlement rule.
Assumption:
Last Monthly Wage (LMW) = SAR 16,000
Step 1: Calculate the Full Theoretical EOSB (Article 84)
| Service Segment | Formula | Calculation | Value (SAR) |
|---|---|---|---|
| First 5 Years (0.5× Rate) | 5 × 0.5 × 16,000 | 2.5 × 16,000 | 40,000 |
| Subsequent 2.5 Years (1.0× Rate) | 2.5 × 1.0 × 16,000 | 2.5 × 16,000 | 40,000 |
| Total Full Theoretical EOSB | - | - | 80,000 |
Step 2: Apply the Two-Thirds Resignation Reduction (Article 85)
| Calculation | Formula | Result |
|---|---|---|
| Resignation Entitlement | Total EOSB × ⅔ | 80,000 × ⅔ = SAR 53,333.33 |
⚖️ Note: The reduction factor (⅔) is applied to the gross EOSB that already includes the 1.0× accrual for post-fifth-year service.
Importance and Final Settlement Dues
The tiered system ensures that workers who remain longer in service receive progressively higher proportions of their earned EOSB - reflecting greater loyalty and sustained contribution.
- Boundary Point: Resigning one day after completing the fifth year yields a much larger payout than resigning one day before.
- Full Entitlement Path: After completing 10 full years, the worker becomes entitled to 100% of the EOSB.
👉 Review the Full Entitlement Rule (10+ Years) → - Settlement Timeline: If the worker resigns, the employer must settle all EOSB dues within 14 days from the contract’s end date.
👉 View the Full Guide to Saudi EOSB Resignation & Termination Entitlement →
Any unresolved disputes or questions must be formally directed to the relevant Saudi authorities for official clarification and binding decisions.
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