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Related tool:
Resignation Gratuity Calculator
— calculate your dues on resignation by last salary and years of service.
On resignation, the end-of-service gratuity is not always paid in full — it is subject to graduated fractions by years of service under Saudi labor law. This guide explains the fractions and how the full award is calculated, with an example.
Resignation fractions by years of service
| Years of service | Portion of the award due |
|---|---|
| Under 2 years | No gratuity |
| 2 to under 5 | One-third (⅓) |
| 5 to under 10 | Two-thirds (⅔) |
| 10 years or more | Full award |
How is the full award calculated?
The full award = half a month for each of the first 5 years + one full month for each year thereafter, based on the last basic wage. It is then multiplied by the resignation fraction.
Worked example
An employee with a last salary of SAR 10,000 and 6 years of service who resigned:
Full award = (5 × ½ + 1 × 1) × 10,000 = SAR 35,000
Resignation fraction (5–10 years) = two-thirds
Amount due = 35,000 × ⅔ = SAR 23,333.
Frequently Asked Questions
It depends on length of service: no gratuity if under 2 years, one-third of the full award for 2 to under 5 years, two-thirds for 5 to under 10 years, and the full award if service reaches 10 years or more.
The full award = half a month for each of the first five years + one full month for each year thereafter, based on the last basic wage. The resignation fraction is then applied by length of service.
Yes. When the employer ends the contract, the full award is due. On resignation, the graduated fractions apply (none, one-third, two-thirds, full) by years of service.
Yes, the gratuity is calculated for fractions of a year in proportion to the time worked, so months beyond full years are not lost.
Use the free resignation gratuity calculator: enter your last salary and years of service, and the tool calculates the full award, applies the resignation fraction, and shows the amount due.