Article 84 of the Saudi Labor Law sets the end-of-service award: half a month per year for five years, a month after. Text, Articles 85 and 87, example.
Short answer: Article 84 of the Saudi Labor Law is the core rule on the end-of-service award: when the employment relationship ends, the employer pays half a month's wage for each of the first five years and a full month's wage for each later year, based on the last wage, with parts of a year counted pro rata. Article 85 reduces this on resignation, and Article 87 lists cases where the full award is due anyway.
If your contract has ended or you are thinking of ending it, "Article 84" is the first thing you hear about. It is the article that creates the end-of-service award and its basic formula, and it is always read with Articles 85 and 87. This page quotes Article 84 as published, explains how it fits with the neighbouring articles and gives one illustrative example. For the full step-by-step calculation, see our end-of-service award guide, or enter your figures in the end-of-service calculator. For a review of your dues in a dispute, see our labor lawyer service.
What does Article 84 say?
Article 84 of the Labor Law, as published by the Bureau of Experts, reads in translation:
"When the employment relationship ends, the employer shall pay the employee an award for the period of service, calculated on the basis of half a month's wage for each of the first five years and one month's wage for each subsequent year. The last wage is taken as the basis for calculating the award, and the employee is entitled to an award for parts of a year in proportion to the time spent at work."
The Bureau of Experts page shows no amendment to this article among the Royal Decree M/44 amendments.
What does it mean in practice?
Trigger: the end of the employment relationship.
Rate: half a month's wage per year for the first five years, a full month's wage per year after that.
Basis: the last wage.
Part years: counted pro rata, so months beyond whole years are not lost.
How do Articles 84 and 85 differ?
Article 84 sets the full award. Article 85 sets the share of it due when the relationship ends because the employee resigned: one third after at least two and up to five consecutive years, two thirds after more than five and less than ten years, and the full award after ten years or more. It does not provide for any award on resignation before two consecutive years. In other words, Article 85 takes the Article 84 result and gives you a fraction of it. For resignation rules and a template, see our resignation letter template.
How does Article 87 relate to Article 84?
Article 87 is an exception to Article 85: the full award is due where the employee leaves because of force majeure beyond their control, and where a female employee ends the contract within six months of her marriage contract or within three months of giving birth. An employee who leaves under Article 81 of the Labor Law also keeps all statutory rights, so the departure is not treated as a resignation.
Do commissions count in the wage basis?
Article 86 allows the parties to agree that commissions, percentages of sales and similar variable elements are excluded, in whole or in part, from the wage on which the award is calculated. If part of your income is commission, check your contract.
When must the award be paid?
Article 88 requires the employer to pay the wage and settle the employee's dues within one week at most of the end of the relationship, or within two weeks where the employee ended the contract. The employer may deduct any work-related debt owed to it.
When is the award lost?
Termination under Article 80, in the specific cases it lists, provided the employee is given the chance to object. See Articles 80 and 81 of the Labor Law.
Termination during probation: Article 54 provides that no award is due for it. See Article 53 of the Labor Law.
Resignation before two consecutive years, for which Article 85 provides no award.
Illustrative example
The figures are for illustration only. An employee's relationship ends after 3 years and 4 months, with a last wage of SAR 9,000:
Half a month's wage = SAR 4,500.
Three full years: 3 × 4,500 = SAR 13,500.
Four months: (4 ÷ 12) × 4,500 = SAR 1,500.
Award under Article 84 = SAR 15,000.
If he resigned, his service is between two and five years, so under Article 85 he receives one third = SAR 5,000, unless Article 87 applies. Try your own figures in the end-of-service calculator.
Frequently asked questions
Does Article 84 apply to both fixed-term and indefinite contracts?
The text links the award to the end of the employment relationship without distinguishing between them; how the contract ends affects the amount.
Is it based on basic salary only?
The text says "the last wage", not basic salary only; Article 86 allows commissions and similar items to be excluded by agreement.
Do I get anything for months beyond whole years?
Yes, parts of a year are counted pro rata.
What is the difference between Articles 84 and 85 in short?
Article 84 calculates the full award; Article 85 says how much of it you get when you resign.
Disagreeing with your employer about your award?
Disputes are rarely about the formula; they are about the elements of the last wage, the length of service and how the contract ended. Our licensed lawyers review your dues and represent you in amicable settlement and before the labor court across Saudi Arabia, in person and remotely.
Request a case review
Official source: Labor Law — Bureau of Experts
Note: this article is general information about the Saudi Labor Law and is not legal advice for any specific case. The figures are illustrative, and outcomes depend on the contract, the wage, the facts and the documents, so we recommend consulting a qualified lawyer before taking any action.
