Saudi Arabia End Of Service Calculator

Saudi End of Service Gratuity Formula:

\[ Gratuity = \frac{Last\ Salary}{30} \times (15 \times Years_{\leq5} + 21 \times Years_{>5})\ days \]

Gratuity (SAR):

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1. What is Saudi End of Service Gratuity?

The Saudi End of Service Gratuity is a legal entitlement for employees under Saudi Labor Law, calculated based on the employee's final salary and years of service. It serves as a financial reward for years of service upon termination of employment.

2. How Does the Calculator Work?

The calculator uses the Saudi gratuity formula:

\[ Gratuity = \frac{Last\ Salary}{30} \times (15 \times Years_{\leq5} + 21 \times Years_{>5})\ days \]

Where:

\( Last\ Salary \) — Final monthly salary in Saudi Riyals (SAR)
\( Years_{\leq5} \) — Years of service up to 5 years
\( Years_{>5} \) — Years of service beyond 5 years
15 — Days per year for first 5 years
21 — Days per year for years beyond 5

Explanation: The calculation converts monthly salary to daily rate, then multiplies by the appropriate number of days based on years of service according to Saudi labor regulations.

3. Importance of Gratuity Calculation

Details: Accurate gratuity calculation ensures employees receive their legal entitlements and helps employers comply with Saudi labor laws, avoiding legal disputes and penalties.

4. Using the Calculator

Tips: Enter last monthly salary in SAR and total years of service. The calculator automatically applies the correct rates for years before and after 5 years of service.

5. Frequently Asked Questions (FAQ)

Q1: What is included in "last salary" for calculation?
A: Last salary typically includes basic salary and regular allowances, but excludes bonuses, overtime, and other irregular payments unless specified in employment contract.

Q2: Are part-time years counted?
A: Only full-time continuous service is typically counted. Part-time or interrupted service may have different calculation methods.

Q3: What happens if employment is terminated for cause?
A: Gratuity rights may be affected if termination is for disciplinary reasons or gross misconduct. Consult Saudi labor law for specific cases.

Q4: Is gratuity taxable in Saudi Arabia?
A: End of service benefits are generally not subject to income tax in Saudi Arabia under current regulations.

Q5: What about employees with less than 2 years of service?
A: Employees with less than 2 years of continuous service may not be entitled to gratuity unless specified in employment contract.