How to Calculate End of Service Benefit Step by Step

Published: July 2026 | 8 min read

End of Service (EOS) Benefit is one of the most important financial rights for employees in the Saudi private sector. This practical guide walks you through calculating your EOS benefit accurately according to Saudi Labor Law.

Step 1: Determine Your Basic Salary

The first step is determining your monthly basic salary. The basic salary is the fixed wage an employee receives for their work, excluding allowances such as housing, transportation, or communication allowances. Article 84 of the Labor Law states that the benefit is calculated based on the "last wage the employee was receiving."

Step 2: Calculate Service Duration

Service duration is calculated in years from the employment start date to the termination date. Partial years are converted to decimal fractions. For example, 6 years and 6 months equals 6.5 years.

Step 3: Calculate Gross Benefit

The gross benefit is calculated using this formula:

First 5 years: Basic salary × years of service (max 5) × 0.5
After 5 years: Basic salary × years exceeding 5
Total: First 5 years result + Post-5 years result

Step 4: Apply Fraction Ratio

For employer termination or contract end: Full benefit (100%).
For resignation: Less than 2 years: No benefit. 2-5 years: One-third. 5-10 years: Two-thirds. Over 10 years: Full benefit.

Step 5: Calculate Final Benefit

Final benefit = Gross benefit × Entitlement ratio (based on termination reason)