Article 85 of the Saudi Labor Law
المادة 85 من نظام العمل · الباب الخامس: علاقات العمل
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 إذا زادت مدة خدمته على خمس سنوات متتالية ولم تبلغ عشر سنوات، ويستحق المكافأة كاملة إذا بلغت مدة خدمته عشر سنوات فأكثر.
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 85 explained in plain English
This article regulates a special way in which an employment relationship can end: the worker's resignation of their own will. Under Article 84, the general rule is that the employer pays the worker an award for the period of service when the relationship ends. Article 85 provides that a worker who resigns is not necessarily entitled to the full award, but to a part of it that increases with the length of their continuous service.
The article divides the entitlement into three tiers:
- Service of not less than two consecutive years and not more than five years: the worker is entitled to one third of the award.
- Service of more than five consecutive years but less than ten years: the worker is entitled to two thirds of the award.
- Service of ten years or more: the worker is entitled to the full award.
It follows from the text that a worker who resigns before completing two consecutive years is not entitled to any part of the award under this article, because it sets a minimum of two years. Note also that the article requires the period of service to be consecutive, that is, continuous with the same employer.
The way the underlying award to which these proportions apply is calculated is set out in Article 84: half a month's wage for each of the first five years and a month's wage for each year after that, based on the last wage, with parts of a year counted in proportion. One third, two thirds or the whole of the result is then taken, depending on the tier into which the period of service falls. Article 86 permits an agreement to exclude commissions, percentages of sales and the like from the wage on which the award is calculated.
In practical terms, this rule helps a worker who is considering resigning understand how the timing affects their entitlements, since resigning before completing two years, before passing five, or before reaching ten directly affects the proportion due. If there is a dispute over how the period or the amount is calculated, it is advisable to consult a lawyer who specializes in labor cases.
Practical example
Ahmed worked for a company in Jeddah for 7 continuous years, with a last wage of SAR 10,000 per month, and then submitted his resignation. The full award is first calculated under Article 84: for the first five years, 5 × 5,000 = SAR 25,000, and for the next two years, 2 × 10,000 = SAR 20,000, for a total of SAR 45,000. Because Ahmed resigned after service of more than five years but less than ten, he is entitled under Article 85 to two thirds of this amount, that is SAR 30,000. Had he completed 10 years before resigning, he would have been entitled to the full award.
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 85 of the Saudi Labor Law
Is a resigning worker entitled to an end-of-service award?
Yes, but at a proportion that depends on the length of their continuous service: one third of the award for two to five years, two thirds if it exceeds five years but is less than ten, and the full award at ten years or more.
What if the worker resigns before completing two years of service?
Article 85 requires service of not less than two consecutive years for entitlement to one third of the award, so a worker who resigns before completing that period is not entitled to any part of the award under this article.
How is the award to which the Article 85 proportions apply calculated?
The full award is calculated first under Article 84: half a month's wage for each of the first five years and a month's wage for each year after that, based on the last wage. One third, two thirds or the whole of it is then taken, depending on the length of service.
Are commissions counted in the wage when calculating a resigning worker's award?
Article 86 permits an agreement not to count all or some commissions, percentages of sales and similar items in the wage on which the award is settled. If there is such an agreement, they are excluded from the calculation.
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 84
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.
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
- 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.