What is my end-of-service worth?

What the Saudi Labour Law's end-of-service award comes to on your wage and your years, and what resigning rather than being let go changes about it. It is Saudi Arabia only — every Gulf state writes this rule differently, and it is the statutory minimum on the basic wage, and a contract can be better than the law but not worse.

• Resigning keeps 67% of the award. The rest is what the timing of leaving costs, not what the work was worth.

8 years on a basic wage of 12,000 earns 44,000, and resigning now leaves 22,000 behind, assuming service is continuous.

Article 84 of the Saudi Labour Law: "the employer shall pay the worker an end-of-service award of a half-month wage for each of the first five years and a one-month wage for each of the following years. The end-of-service award shall be calculated on the basis of the last wage and the worker shall be entitled to an end-of-service award for the portions of the year in proportion to the time spent on the job."

Article 85, where the job ends by resignation: "he shall be entitled to one third of the award after a service of not less than two consecutive years and not more than five years, to two thirds if his service is in excess of five successive years but less than ten years and to the full award if his service amounts to ten or more years."

Two things in that wording do most of the surprising. The rate doubles after the fifth year, so a sixth year is worth twice a fifth. And on resignation the fraction steps at two, five and ten years — which means the month you choose to leave can be worth more than the year you spent earning it.

At exactly five years the first tier still applies: the statute says "not more than five years" for the third and "in excess of five" for the two thirds. That boundary is written the way it is on purpose, and it is the one an implementation working from memory gets wrong.

half a month per year for the first five, a full month for each year after

On resignation Article 85 pays a third from two years, two thirds above five, and all of it at ten.

What it assumes

• The wage used is the basic monthly wage as the contract defines it. Allowances are included only where the contract makes them part of the wage, and most do not.
• Service is continuous. A break in service usually restarts the count, and the rule for what counts as a break is in the contract rather than in the arithmetic.
• This is the statutory minimum. A contract may pay more than the law requires and many do; none may pay less.