The EOSB Calculator (End of Service Benefit calculator) is an essential financial tool for every employee and employer in Saudi Arabia. It helps determine the compensation an employee is entitled to receive at the end of their employment period, whether through resignation, termination, or retirement. Saudi Labour Law, particularly Articles 84 to 87, defines this benefit as a reward acknowledging the employee’s service and dedication over time. Understanding how this calculation works is vital for employees who wish to ensure fair treatment and for employers who must comply with the law and maintain transparency.
What Is EOSB (End of Service Benefit)?
End of Service Benefit (EOSB) is a lump-sum payment legally required under Saudi labour law. It represents financial gratitude to employees who have served an organisation for a specific period. The EOSB calculator is designed to make this process simpler by automating the calculations, ensuring the correct amount is determined according to labour regulations.
EOSB applies to both Saudi citizens and expatriate employees, provided they have completed at least one year of continuous service. Whether under a fixed-term or open-ended contract, the calculation follows the same legal foundation.
Purpose of the EOSB Calculator
The EOSB calculator serves as a transparent and efficient mechanism for both employers and employees. Its main purposes are:
-
Transparency: Ensures employees know exactly what they are entitled to.
-
Accuracy: Prevents mistakes in manual computation and helps employers remain compliant.
-
Clarity: Offers straightforward visibility into the calculation and its breakdown.
-
Fairness: Promotes trust and equality between the employer and employee.
This tool is particularly valuable during resignation, layoffs, or retirement, where misunderstandings about EOSB amounts often arise.
How the EOSB Is Calculated in Saudi Arabia
Under Saudi labour law, the EOSB is calculated based on two key factors: the employee’s final basic salary and the total length of service. The general calculation follows these principles:
-
For the first five years of service: Half a month’s salary for each year worked.
-
For any additional years after the first five: One full month’s salary for each additional year.
Formula:
EOSB = (½ × Salary × Years of Service in first 5 years) + (1 × Salary × Years of Service after 5 years)
This formula applies when the employee’s service ends due to termination, redundancy, or completion of contract. For resignations, entitlement percentages are lower and vary by duration of service.
Key Factors That Affect EOSB Calculation
The following components determine the exact EOSB amount:
1. Basic Salary:
The benefit is calculated based on the basic salary, excluding bonuses, commissions, or variable allowances unless specified in the employment contract.
2. Duration of Service:
Longer service results in a higher reward. Partial years are often calculated proportionally.
3. Reason for Employment Termination:
The reason for leaving significantly influences entitlement. Resignation, termination, or retirement all have different outcomes.
4. Contract Type:
Fixed-term contracts may end with full entitlement at completion, while indefinite contracts might have flexible results depending on how they end.
5. Special Circumstances:
Women who resign within six months of marriage or within three months after childbirth are eligible for full EOSB regardless of years worked.
EOSB Calculation Scenarios
1. Termination by Employer:
If an employee is terminated without misconduct:
-
First five years: ½ month’s salary per year.
-
After five years: One month’s salary per year.
2. Employee Resignation:
When an employee resigns voluntarily:
-
Less than 2 years of service: No entitlement.
-
Between 2–5 years: One-third of full benefit.
-
Between 5–10 years: Two-thirds of full benefit.
-
More than 10 years: Full benefit.
3. Contract Completion:
For fixed-term contracts, full EOSB is due if the contract ends naturally without renewal.
4. Retirement or Death:
Upon retirement or death, the employee or their family receives the full EOSB regardless of duration.
Example Calculation Using the EOSB Calculator
Consider the following example:
-
Basic monthly salary: SAR 10,000
-
Total service: 8 years
-
Termination reason: By employer
Calculation:
First 5 years → 5 × (½ × 10,000) = 25,000 SAR
Next 3 years → 3 × (1 × 10,000) = 30,000 SAR
Total EOSB = SAR 55,000
If the same employee resigns voluntarily after 8 years, they receive two-thirds of the full amount:
EOSB = 55,000 × (⅔) = SAR 36,666
This example highlights why the EOSB calculator is a reliable and transparent way to estimate the benefit accurately.
Legal Foundation under Saudi Labour Law
Saudi Labour Law enforces EOSB entitlements as part of employee rights. The main provisions include:
-
Article 84: Every employee who completes at least one year of service is entitled to an EOSB payment.
-
Article 85: Employees who resign are entitled to a portion of EOSB based on years served.
-
Article 86: Covers cases of premature contract termination.
-
Article 87: Defines exceptions such as retirement, death, or female employees resigning due to marriage or childbirth.
These legal references ensure that the EOSB calculator is consistent with government regulations and fair to all employees.
Advantages of Using an EOSB Calculator
1. Time Efficiency:
Calculations that once took hours can now be completed in seconds.
2. Precision and Compliance:
The calculator follows official Saudi labour law standards, avoiding human errors.
3. Transparency:
Employees can verify entitlements easily, leading to higher satisfaction and reduced disputes.
4. Strategic Financial Planning:
Employees planning a career move or retirement can estimate their EOSB and make informed decisions.
5. Legal Protection:
Employers can demonstrate compliance and avoid potential penalties or employee complaints.
Common Mistakes to Avoid
Even with automated tools, mistakes can occur. Avoid these frequent errors:
-
Using gross salary instead of basic salary.
-
Forgetting to include partial years in service duration.
-
Confusing resignation with termination.
-
Failing to account for the latest salary revision.
-
Overlooking special legal exceptions such as marriage or childbirth.
Employer Responsibilities Regarding EOSB
For employers, the EOSB is not optional. It is a legal obligation that must be calculated and recorded throughout an employee’s tenure. Key recommendations for employers include:
-
Keep precise employee records and salary history.
-
Regularly update EOSB accruals in financial statements.
-
Use official or verified calculators to prevent inconsistencies.
-
Disclose EOSB details clearly in final settlements.
Some modern HR systems in Saudi Arabia automatically compute EOSB each month, ensuring accurate accounting and budget forecasting.
How Employees Can Use the EOSB Calculator Effectively
Employees can make the most of the calculator by:
-
Checking how EOSB grows each year of service.
-
Comparing resignation versus termination outcomes.
-
Ensuring that employer calculations match legal expectations.
-
Estimating benefits for career planning or personal budgeting.
The calculator empowers workers with knowledge and transparency regarding their rights.
Important Details About EOSB Payments
-
Employers must pay EOSB within one week after termination or within two weeks after resignation.
-
EOSB payments are not considered taxable income for expatriates.
-
Breaks in employment may or may not affect entitlement depending on contract terms.
-
Employees should retain payslips, contracts, and resignation letters for future reference.
-
Any disputes over EOSB must be reported to the Labour Office within one year of the termination date.
EOSB for Part-Time and Domestic Workers
Saudi labour regulations extend EOSB rights to part-time employees and domestic workers. Part-timers receive proportional EOSB based on hours worked, while domestic workers are entitled to one month’s salary after completing four years of service. This inclusion demonstrates Saudi Arabia’s commitment to fair treatment across all categories of workers.
The Role of Technology in EOSB Calculations
With Saudi Arabia’s Vision 2030 initiative promoting digital transformation, EOSB calculations are increasingly automated. Platforms such as Qiwa, Jisr, and other HR management systems now integrate the EOSB calculator into their payroll features. Digital tools help ensure:
-
Accurate real-time tracking of entitlements.
-
Automated record keeping.
-
Transparent access for both employers and employees.
Tips to Maximise EOSB Entitlement
-
Avoid resigning before completing two full years.
-
Stay beyond five years to qualify for full monthly entitlement.
-
Clarify which allowances count toward your basic salary.
-
Document every change in contract or salary.
-
Recheck EOSB using reliable calculators before signing final settlement documents.
Future Outlook
Saudi Arabia is moving toward a fully digital labour ecosystem. Future EOSB calculators may integrate predictive analytics to estimate future entitlements based on salary growth, promotions, or contract renewals. Employees will likely be able to track benefits in real time through HR platforms, making the system more transparent and accessible than ever before.
Conclusion
The EOSB calculator is far more than a numerical tool; it is a symbol of fairness and legal protection for employees in Saudi Arabia. By understanding how this benefit is calculated and using the calculator effectively, employees can secure their rights, while employers can maintain compliance and trust. Awareness of EOSB calculations strengthens financial planning, workplace transparency, and employee satisfaction.