Resignation vs Termination in Saudi Arabia: How It Affects Your EOS

How your employment ends in Saudi Arabia dramatically changes the end of service gratuity you receive. The same salary and years of service can produce wildly different final amounts. Here's exactly how it works.

The Rule in One Sentence

If your employer terminates you, you get the full gratuity. If you resign, you get a fraction based on service length.

Resignation Formula

Service length	What you get
Less than 2 years	Nothing
2 to less than 5 years	One-third of the calculated gratuity
5 to less than 10 years	Two-thirds of the calculated gratuity
10 years or more	Full gratuity

Real Example: Same Employee, Different Reasons

Employee X earns 12,000 SAR/month (basic + housing) with 4 years of service.

Full calculated gratuity: 4 years × (12,000 / 2) = 24,000 SAR

• If terminated by employer → 24,000 SAR
• If resigned → 24,000 × 1/3 = 8,000 SAR

The difference: 16,000 SAR — just because of who ended the contract.

When Resignation Still Gets Full Gratuity

Article 87 of the Labor Law lists cases where a resigning employee still receives full gratuity:

1. Non-payment of salary for 3+ consecutive months.
2. Employer's fundamental breach of contract.
3. Dangerous working conditions.
4. Female employee getting married or giving birth (within 6 months).
5. Force majeure ending employment.

What About Fixed-Term Contracts?

If a fixed-term contract expires and is not renewed, it's treated the same as termination by the employer — full gratuity is due.

How to Negotiate a "Mutual Termination"

Many companies offer mutual termination agreements to avoid disputes. In such cases, the treatment as termination or resignation should be explicitly stated in the settlement. Consult HR or a labor lawyer before signing.

Try the Free Calculator

Enter your salary, years of service, and select "Resignation" or "Termination" in our free EOS calculator to see your exact entitlement.

FAQ

What if I quit without notice?

You may be liable for the notice period's salary but this doesn't change your gratuity calculation.

Are unused vacation days added to EOS?

Yes, but they're paid separately at the current daily wage, not as part of the gratuity.

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