How to Calculate End of Service Benefit (ESB) in Saudi Arabia


In Saudi Arabia, ESB (End of Service benefit) is an amount of money that every employee is entitled to have at end of his job or services. It is given by his employer. It will be a good idea to know how you would calculate your ESB. Recently while reading ArabNews I discovered this article that is written by a law expert “Muhammad Jaber Nader”.

The ESB is based on your Last Monthly Wage, or LMW. This is your last salary plus any other allowances, like monthly transport or housing compensations. You get half of your LMW for each of the first five years of service completed and you receive a full LMW for every year after that. To calculate the portion of your ESB for any additional time beyond your last completed year you calculate your daily salary and multiply that by the number of days over your last completed year.

To do this, take your LMW and:

a)      Multiply LMW by 12 to get your annual salary based on the 12-month calendar.

b)      Take that Sum and divide it by 365.25 to get your Daily salary.

c)       Multiply that number by the number of days into the last year of your employment.

For example, if you actually worked 16 years and 27 days then don’t forget to include the ESB for those 27 days by calculating your daily salary.

Another thing to remember is that you are entitled to compensation for unused vacation time.

21 days per year for the first five years and 30 days per year after that. This is the national law, but you check your contract to see if your company gives you more days per year than the legal minimum. For 16 years of service you have 435 of paid vacation days. Add up the days you have claimed and if it’s less than 435, then add up the number of unclaimed days and multiply that number by your daily salary and add that to your ESB.

You are also entitled to an end-of-service certificate that mentioning your job and the number of years spent in the service. This can be used as proof of service in future employment searches here or back home. If you were recruited from abroad your employer must pay for your final-exit return plane ticket.

Finally, it’s important to remember that providing a no-objection certificate (NOC)* that allows you to find work elsewhere in the Kingdom without leaving and returning no sooner than 12 months after your final exit is at your employer’s discretion. You cannot compel your employer to release you back into the Saudi job market. Sometimes you can negotiate for obtaining the NOC by giving up some of your end-of-service benefits. Some employers are happy to release you locally to forgo the need to pay for your return ticket. You can also offer to “pay” for this NOC by giving up a portion of your ESB, like owed vacation time or a set sum.

*Update: I heard news that NOC is no more required to return back to Saudi Arabia. When I get some official proof/news I’ll share it.

About Yasir Imran

Yasir Imran is a Pakistani living in Saudi Arabia. He writes because he want to express his thoughts. It is not necessary you agree what he says, You may express your thoughts in your comments. Once reviewed and approved your comments will appear in the discussion.
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53 Responses to How to Calculate End of Service Benefit (ESB) in Saudi Arabia

  1. Mohsin says:

    Aslamualekum Mr. Yassir,
    I m working in Saudi arabai since 6th nov 2004 to till now (around 7 years). my last monthle wage was 3500 SR(2750 basic+250 food Allowance+500 fixed O.T. baddal maqtooa=3500). every year i m getting 3 bonus(basicx3). Housing and insurance by the company. here i want to ask you how much will be my ESB till 20th January 2011. plz reply.

  2. Mohammad Habibur Rahman says:

    i am working in saudi arabia since 15th March 1998 to till now (around 14 years). my last monthle wage was 8000sr (6000 basic +500 food allowance +1500 others). Housing , transport and insurance by the company . i went vacation for 4 months in 2000 , for 3 months in 2003 and for 1.5 month in 2010 . may i know how much will be my ESB till 30th March 2012 .

  3. Mr. Imran Yaser
    As Salam Alaikum

    my question is :- how is end of service calculated ?
    for full package of salary or only for basic and housing allowances :
    please clarifyit as soon as possible i am going on exit shortly
    Thanks and regards

    Muhammad Ali Mujahed
    Riyadh
    0509425144
    alimujahed1971@mail.com

  4. NABI BUX MIRJAT says:

    Dear Brother….i want to know that as per contract my transport allowance is 400SR+HOUSING ALLOW833SR+BASIC 5000SR TOTAL 6233SR…..BUT COMPANY IS PROVIDING ME THE RESIDENCE AND TRANSPORT CURRENTLY…..SO IS THIS STILL VALUABLE THAT MY ESB WILL BE CALCULATED ON THE BASIS OF 6233 SR OR ON THE BASIS OF 5000SR…….

    I HOPE THAT U WILL REPLY ME….
    THX
    NABI BUX MIRJAT PAKISTANI…….HAIL

  5. zaffar ali says:

    Mr. Imran Yaser
    As Salam Alaikum

    with due to respect that i am from pakistan sindh larkana, i am jobless here in pakistan i have to come to saudi arabia but sir i have no any income source can you help me in the name of allah
    yours sincerly
    zaffar ali

  6. Mustafa says:

    We calculate EOSB as follows;
    Basic Salary+Housing Allowance+Transportation Allowance (Bonus, telephone or any other allowance is never included)
    Half of LMW for the first 2.5 years
    and we also pay ex-gratia to the whole final settlement – 100% in case of employees who worked for more than 5 years.

  7. salam says:

    I have been working since November 1992 until 6th April (19 ½ years) continuously with the company. On 7th April I went on medical leave for treatment in Kerala due to Cervical Spondylosis (neck), as advised by Al-Mana Hospital, Dammam, along with my wife and child, I am residing in Dammam with my three (3) children and wife. Before 3 days of departure to India, I have been asked to sign a new clause, written on the letter head, that I have to work for reduced Salary and without family facilities upon return from vacation. But as promised the company did not pay my service benefits until that day (06-04-2012). I had no other alternative than signing that paper, as my appointment with Doctor in Kerala was fixed for follow up treatment. I had severe pain on neck, tired, stressed and was really suffering with mental tension.
    When I returned after medical treatment on 13th September 2012, I have informed in writing that I am ready to work, but cannot afford any deduction of my salary or facilities due to the increased family expenditures and university fees for the children.
    1. I did not take the Service benefits at the time of going on vacation.
    2. Now the company urging me to work with new reduced salary, which I did not accept, but still continuing the work.
    3. Am I eligible to receive my service benefits in full as per the last salary earned before accepting the new clause.?
    4. Is there any such rule that the company can ask the employee to work with less salary without previous settlement?
    5. Can I give a notice to the company mentioning 3 months time and that as I cannot accept the new clause; hence I am ready to leave on final exit?
    6. In that case, will the company have to calculate my ESB based on previous salary as they did not make any settlement yet or it will based on new salary?
    7. is there any deduction will take place as I am giving 3 months notice and ask them to repatriate me. My Iqama is valid until 31st March 2013.
    Looking forward to your kind advice and help.
    Thanking you,
    Yours faithfully,
    Salam

  8. Nurul Amin says:

    If any one having company provided transport, is there any amount to be considered in calculation of his ESB. Please advise

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