Article 84 of the Saudi Labor Law
المادة 84 من نظام العمل · الباب الخامس: علاقات العمل
Article 84 requires the employer to pay the worker an end-of-service award when employment ends, based on the last wage: half a month per year for the first five years and a month per year after.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا انتهت علاقة العمل وجب على صاحب العمل أن يدفع إلى العامل مكافأة عن مدة خدمته تحسب على أساس أجر نصف شهر عن كل سنة من السنوات الخمس الأولى، وأجر شهر عن كل سنة من السنوات التالية، ويتخذ الأجر الأخير أساسًا لحساب المكافأة، ويستحق العامل مكافأة عن أجزاء السنة بنسبة ما قضاه منها في العمل.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 84 explained in plain English
Article 84 sets the basic rule for the end-of-service award, a sum the employer must pay the worker when the employment relationship ends, in return for the worker's period of service. The article protects the worker and imposes a direct obligation on the employer, and this obligation does not depend on any special agreement in the contract.
How it is calculated under the text:
- The first five years: half a month's wage for each year.
- The years after the fifth: a full month's wage for each year.
- Parts of a year: the worker is entitled to an award for them in proportion to the time actually spent working, so incomplete months are not disregarded.
The basis on which the award is calculated is the worker's last wage at the end of service, not the average wage or the wage at the start of the contract. This means that any raises the worker received during service are reflected in the calculation for the whole period of service.
Relationship with neighboring articles:
- Article 84 represents the case of full entitlement, while Article 85 governs the special case where the relationship ends by the worker's resignation: the worker is then entitled to one third of the award if the service is from two consecutive years up to five years, two thirds if it exceeds five years but is less than ten, and the full award if it reaches ten years or more. So the calculation always starts from the rule in Article 84, and the proportions in Article 85 are then applied to it if the end was by resignation.
- Article 83 deals with the worker's obligations after the contract ends (non-competition and non-disclosure of secrets), which are independent obligations that the text does not link to the award.
Article 84 does not specify the payment date or what counts as part of the wage, as these matters are governed by other provisions of the law. If there is a dispute over the length of service or the amount of the last wage, it is advisable to consult a lawyer who specializes in labor cases.
Practical example
Ahmed worked for a company in Riyadh for 7 years and 6 months, and his contract then ended on expiry of its term. His last wage was SAR 8,000 per month. Under Article 84, his award is calculated as follows: for the first five years, half a month per year, that is 5 × 4,000 = SAR 20,000; for the following two and a half years, a month per year, that is 2.5 × 8,000 = SAR 20,000; so the total award is SAR 40,000. Had Ahmed resigned instead of his contract expiring, Article 85 would apply and he would be entitled to two thirds of this amount, because his service exceeded five years but was less than ten.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Active contributorFrequently asked questions about Article 84 of the Saudi Labor Law
How is the end-of-service award calculated under the Saudi Labor Law?
Under Article 84 it is calculated on the basis of the last wage: half a month's wage for each of the first five years and a month's wage for each year after that, with parts of a year counted in proportion to the time the worker spent working.
Is the award calculated on the last wage or the average wage?
Article 84 is explicit that the last wage is the basis for calculating the award for the whole period of service.
Is a worker entitled to an award for months that do not make up a full year?
Yes. Article 84 provides that the worker is entitled to an award for parts of a year in proportion to the time spent working.
Does the award differ if the worker resigns?
Yes. Article 84 sets the full award, while Article 85 sets the share the worker is entitled to on resignation: one third after two to five years of service, two thirds if it exceeds five years but is less than ten, and the full award at ten years or more.
More articles on End-of-Service Award
- Article 54Amended (1436 AH)
Article 54 prevents placing a worker on probation more than once with the same employer except on conditions, and provides that ending the contract during probation gives rise to no compensation or end-of-service award.
لا يجوز وضع العامل تحت التجربة أكثر من مرة واحدة لدى صاحب عمل واحد. واستثناء من ذلك يجوز باتفاق طرفي العقد - كتابة - إخضاع العامل لفترة تجربة أخرى بشرط أن تكون
- Article 56
Article 56 provides that the term to which a fixed-term contract is renewed is treated as an extension of the original term when calculating the worker's rights linked to length of service.
في جميع الحالات التي يتجدد فيها العقد لمدة محددة، تعد المدة التي تجدد إليها العقد امتدادًا للمدة الأصلية في تحديد حقوق العامل التي تدخل مدة الخدمة في حسابها.
- Article 64Amended (1436 AH)
Article 64 requires the employer, on the end of the contract, to give the worker a free service certificate free of anything harmful to them, and to return all certificates and documents they deposited with it.
يلتزم صاحب العمل عند انتهاء عقد العمل بما يأتي : 1 - أن يعطي العامل – بناءً على طلبه – شهادة خدمة دون مقابل، يوضح فيها تاريخ التحاقه بالعمل، وتاريخ انتهاء علاقت
- Article 79 bisAmended by M/44
Article 79 bis regulates resignation: it is deemed accepted after 30 days without a reply, acceptance may be deferred up to 60 days by written explanation, and the worker may withdraw it within 7 days.
1- يُعد طلب الاستقالة المقدم مقبولاً إذا مضى على تقديمه (ثلاثون) يوماً دون ردٍّ من صاحب العمل. ولصاحب العمل تأجيل قبول طلب الاستقالة مدة لا تزيد على (ستين) يوما
- Article 85
Article 85 sets a resigning worker's share of the end-of-service award: one third after two to five years, two thirds after five up to ten years, and the full award at ten years.
إذا كان انتهاء علاقة العمل بسبب استقالة العامل يستحق في هذه الحالة ثلث المكافأة بعد خدمة لا تقل مدتها عن سنتين متتاليتين، ولا تزيد على خمس سنوات، ويستحق ثلثيها
- Article 86
Article 86 allows an agreement to exclude commissions, sales percentages and other naturally variable pay from the wage on which the end-of-service award is calculated, as an exception to Article 8.
استثناء من حكم المادة (الثامنة) من هذا النظام، يجوز الاتفاق على ألا تحسب في الأجر الذي تسوى على أساسه مكافأة نهاية الخدمة جميع مبالغ العمولات أو بعضها والنسب ال
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.