gratuity calculator Legal advice

End of Service Benefits(ESB) electronic calculator guide in KSA

 

In Saudi Arabia, employees must have end of service benefits. These end of service benefits in Saudi Arabia (ESI KSA) are obligatory and companies must provide them to keep their compliance with the Saudi labor law end of service. Therefore, to know if they are being well remunerated, most workers use an end of service calculator KSA or end of service calculator Riyadh for their gratuity calculation in KSA.

In this article, we will be talking about ESI KSA or end of service benefits in Saudi Arabia. Let us observe:

-End of service and ESB calculator

-Who deserves the ESB?

-What does the ESB includes?

-End of service benefits payment

-Connect Legal, your best partner in the UAE

1. End of service and ESB calculator

Every KSA employee is eligible for End of Service Benefits at the ending of his or her service term. Here, you can see two End of Service Benefit (ESB) calculators for you. In addition, we also discuss the ESI KSA computation in full in accordance with Saudi Labor Law.

With this calculator, people can easily see their end of service benefit. All they have to do is:

-Dates of employment start and end.

-The number of days you have chosen to take unpaid leave.

-Total gross salary.

-Reason for termination/resignation.

ESI KSA

ESB calculator

This EOS calculator is from the Ministry of Labour of Saudi Arabia (https://laboreducation.mlsd.gov.sa/en/calc). Therefore, to use it, you must provide:

-Type of contract.

-Reason for resignation or termination.

-Complete salary.

-Time of the service.

2. Who deserves the ESB?

Every worker operating in the Kingdom of Saudi Arabia needs to obtain their ESI KSA benefits, except:

-Employees operating under a business visit permit.

-Workers operating under a consultancy contract.

-Employees operating without transferring the sponsorship.

3. What does the ESB include?

The calculation of the gratuity depends on whether the employee was fired or resigned. According to Saudi Labor Law article 84, in the event of termination, an employee is eligible for the following end-of-service benefits:

-Half of the first five years’ compensation for each year of service.

-After the first five years, full pay for each year of service.

-Remember that if an employee is dismissed in accordance with Saudi Labor Law Article 80, there is no ESB elegible.

For example:

A worker who had been with the company for 7 years was fired. His previous monthly pay was SR 10,000. The ESB calculator mentioned above is used to generate the screenshot that follows.

-Five Years X 10,000 / 2 = 25,000 is the ESB for the first five years.

-Next period’s ESB is equal to 2 Years x 10,000, or 20,000.

-Total = 45,000 SR.

ESI KSA

3.1 Resignation ESB

The computation of the ESI KSA benefits in the event of resignation is affected by seven main scenarios.

3.1.1 Within two years, resignation equals ZERO

Article 85 of the Saudi Labor Law states that an employee is not eligible for any end-of-service incentives if he leaves his job within two years of his resignation without finishing his contract.

3.1.2 Within the last two to five years

Article 85 of the Saudi Labor Law states that if an employee leaves their position after two years but before accumulating five years of service:

-They have a right to one-third of his ESB reward.

-Half of the annual income is the ESB Award.

For instance:

After 4 years of employment, an employee left the organization. His previous monthly pay was SR 10,000. The snapshot that follows was taken from the aforementioned calculator for End of Service Benefits.

ESB for the first four years is as follows: SR 6,667 = (10,000/2) X 4 X 1/3.

ESI KSA

3.1.3 5 to 10-year resignation period

According to Saudi Labor Law’s Article 85, an employee who leaves their job before ten years of service but after 5 years is elegible to the following benefits:

-2/3 of his ESB prize.

-5 years at half wage plus 1 year at full salary is the ESB Award.

After 7 years of employment, an employee left the organization. His previous monthly pay was SR 10,000.

Example:

-ESB for the first five years = 10,000 X 2 X (2/3) = SR 13,333

-ESB for the subsequent period = (10,000/2) X 5 X (2/3) = SR 16,667

-Total: 16,667 plus 13,333 equals SR 30,000.

ESI KSA

3.1.4 10 years later, resignation

According to Saudi Labor Law’s Article 85, a worker who leaves a company after completing ten years of service shall receive all of the advantages that were promised to him throughout his employment.

-For the first five years of employment, receive half of your salary annually.

-For the upcoming time, the whole yearly wage.

After 11 years of employment, a worker left the company. His previous monthly pay was SR 10,000. The ESB calculator mentioned above is used to generate the screenshot that follows.

Example:

-ESB for the first five years: SR 25,000 = (10,000/2) X 5 X (1/2).

-10,000 X 6 = SR 60,000 is the ESB for the following period.

-25,000 plus 60,000 equals SR 85,000.

3.1.5 Resignation after the end of the contract.

Employees who leave their jobs before their contracts expire are still elegible to their full end-of-service benefits, which include:

-For the first five years, half of the annual pay.

-Full annual wage following the first five years.

To put it another way, the end of service Saudi labor law will be determined the same manner as if the worker had been fired.

Example:

Prior to his next contract renewal, an employee who had worked for the company for two years left. His previous monthly pay was SR 10,000.

Benefits at the End of Service: SR 10,000 = (10,000/2) X 2.

3.1.6 Article 81 resignation

An employee is still allowed to obtain all of his end-of-service perks even if he resigns in accordance with Saudi Labor Law’s Article 81. The aforementioned end-of-service calculator includes this calculation.

3.1.7 Article 87 resignation

The following employees will additionally receive a full ESB award in accordance with Article 87 of the Saudi Labor Law.

-Female worker who leaves her job within six months of being married.

-A female worker who leaves her job three months after giving birth to a child.

-A worker leaves their job owing to a natural handicap.

-In the case of a worker’s demise.

3.2 What do the ESI SKA benefits include?

All fixed incentives paid to a worker are taken into account for calculating end-of-service rewards, in accordance with Saudi Labor Law’s Article 2. Examples include:

  • Primary Salary.
  • Housing.
  • Transportation.
  • Mobile Payment.
  • However, it excludes certain perks that depend on additional elements, such as bonuses, ticket allowances, and sales incentives.

4. End of service benefits payment

Article 88 of the Saudi Labor Law mandates that an employer pay end-of-service benefits within:

-If a job is terminated, one week.

-In event of resignation, two weeks.

The worker has the right to initiate a case with the Saudi Labor Court in the event that the ESB is not in place within two weeks. In addition, the employer will see a penalization of SR 10,000 for exceeding the 2-week deadline for completing the ESB.

Additionally, the Saudi Arabian Monetary Agency (SAMA) has made it clear that banks do not have the right to withhold the end-of-service bonuses of their clients unless and until they receive a court order authorizing them to do so.

in accordance with Section 16 of Ministerial Council Resolution No. 310, dated July 9, 1434:

-After four years of employment, a domestic employee has the right to one salary.

-A housekeeper or house driver who operated for 12 years would receive three months’ pay as the ESB prize.

Unfortunately, the above-mentioned Saudi Arabian end-of-service calculator was unable to determine the ESB for domestic servants.

5. Connect Legal, your best partner in the UAE

It is important for employees to understand the end of service benefits in Saudi Arabia 2021 and 2022. By doing so, they can obtain their ESI KSA benefits successfully and go on to find another job. Therefore, following our legal advice can come in handy in these cases.

Connect Legal is the best place to find support with any legal issue that someone can have. With us, you can find experts in the following practice areas:

Corporate law

Financial laws

Construction laws

Family laws

Criminal laws

Divorce

Commercial laws

Labor law in the UAE

General civil law

Accident law and more

connect legal

Do you need support to obtain your ESI KSA benefits? Contact us now! Send us an email at contact@connectlegal.ae. Also, you can give us a call at +971 43 316 688. In addition, you can easily register to our site and submit a question. In this way, you will be starting a chat with one of our professionals.

On the other side, thetalentpoint.com has employment offers waiting for you, so reap the benefits of the chance and sign up. To get the job you want, examine the offers after registration and send your CV to contact@thetalenpoint.com.

Danielle

Danielle
Danielle is Head of Operations at Connect Resources. She also advises & manages the legal work of the company having studied Law at John Moore’s University in Liverpool, United Kingdom. Danielle oversees the processes of the company’s various departments and ensures an overall smooth interconnectedness and operation between each in order for the company to function at its highest potential.

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