Learn about the method of calculating the end-of-service gratuity in the Kingdom of Saudi Arabia and some other Arab countries for public sector employees. The end-of-service gratuity or pension, known in many Arab countries as the pension salary, is the financial amount that a person employed in a government or private entity is entitled to receive. At the end of his service period for the institution or facility in which he worked for a period of time, in accordance with the provisions of many different laws and constitutions in all countries of the world, so that it is one of the benefits granted by states to their employees after the end of their service period so that they can provide the basic requirements of life and congratulate With a decent living.

Therefore, many government sector employees in various Arab countries are wondering how to calculate their pension or end of service benefits, and that is what we will show you in the following lines of the information store website, so follow us.

How to calculate end of service benefits نهاية

  • Government employees are entitled to receive an end of service gratuity once the contractual relationship between the worker and the employer ends, whether his work is for a specified period in the institution or for an indefinite period.
  • At the end of the work period, in which the worker becomes unable to work and leaves his job for any reason, whether it is the reason for reaching the retirement age, or affliction with diseases that cannot be cured, such as diseases of disability in the organs that hinder the healthy from work, or mental illnesses.
  • Then the employee gets the value of half of his salary that he was receiving during his work, which he gets in the form of an end-of-service gratuity in the form of a sum of money in return for his years of work, so that the retired person can provide the basic requirements of life and spend on himself in illness, old age and the necessities of life after leaving work.

How to calculate the end of service gratuity in the Kingdom of Saudi Arabia

  • The end of service gratuity in the Kingdom of Saudi Arabia is a sum of money that the employer or the employer must pay to his employees in the event of the end of their service, which is calculated according to the worker’s job grade, the time he spent at work and the financial wage he was receiving.
  • In addition, the worker receives the end-of-service gratuity in the event of his resignation from the institution, which is estimated in case of resignation as follows:
  • In the event that the work period is two years or more – to less than five years, the end-of-service gratuity is estimated at one-third of the salary, and in case the years of work exceed five years, the end-of-service gratuity is estimated at two-thirds of the salary.
  • If the work period is more than five years, but it did not reach ten years, in this case the worker is entitled to receive the full end-of-service gratuity.
  • In the event that the years of service exceed ten years, i.e. up to eleven years or more, the end-of-service gratuity shall be half the monthly salary for each year of the first five years, and in the second five years it shall be estimated by the monthly salary for each year.

The method of calculating the end of service gratuity in the Arab Republic of Egypt

  • The end of service gratuity is granted in the Arab Republic of Egypt after employees in the government sector reach the age of 60, so that the employee receives a reward of half the monthly salary for each of the first five years, with the full monthly wage for each of the following years of work.
  • To be eligible for the end-of-service gratuity in the Arab Republic of Egypt, the worker must have insurance rights for insurance provisions relating to factors of old age, death, partial or total disability cases, in addition to the fact that the employee has exceeded the age of sixty years.
  • In the event that the worker’s service period in the government sector is less than five years, he shall be granted a half-month salary for each year, so that the equation for calculating the end-of-year bonus is as follows:
  • Salary / 24 x length of service in the institution (in months).
  • In the event that the worker’s service period in the government sector exceeds five years, he will be given half a month’s salary for each of the first five years. As follows:
  • Salary / 24 x 60 months + salary / 24 x length of service per month – 60

How to calculate end of service benefits in the UAE الخدمة

The end of service gratuity is calculated in the United Arab Emirates as follows:

  • In the event that the employee leaves his work in which the term of the work contract is indefinite after that it is a continuous service (it is not less than one year and not more than three years), the employee is entitled to receive the amount of one third of the end-of-service gratuity.
  • In the event that the work years exceed three years but do not exceed five years, the worker is entitled to receive two thirds of the due end of service gratuity.
  • In the event that the employee has worked more than five years, he is entitled to receive the full end-of-work reward.

Provisions for end of service benefits in the private sector in the UAE

  • If the employee resigns from work voluntarily before completing one year of service at work, he is not entitled to receive the end of service gratuity.
  • Whereas the employee who has completed one or more than one year in continuous service for the organization obtains the end of service gratuity upon the end of his service, and the days of absence from work without pay are not entered in the process of calculating the period of service of the organization.
  • The end-of-service gratuity is calculated according to the basic value of the highest salary the employee received in his work, i.e. the basic salary allowances (such as housing allowances, mobility allowances, and others) are not included.
  • With the right of the employer to deduct any amounts owed to him from the employee from the financial value of the employee’s end of service gratuity.

Provisions for end of service benefits in the private sector for fixed-term contracts

  • If the employee has worked in the organization for less than one year, he is not entitled to receive the end of service gratuity.
  • If the employee has worked in the organization for less than five years, he is entitled to receive 21 days’ wages for each year of service.
  • If the employee has worked in the organization for more than five years, he is entitled to receive 30 days’ wages for each year of work after the first five years.
  • With a condition in the aforementioned years of work that the financial value of the end-of-service gratuity does not exceed the wages of two years together.

Provisions for end of service benefits in the private sector for indefinite contracts.

In the event of the employer’s termination of the employee’s contract, the financial value of the end of service gratuity shall be calculated as follows:

  • If the employee has worked in the organization for less than one year, he is not entitled to receive the end of service gratuity.
  • In the event that the employee has worked in the organization for more than one year and less than five years, he is entitled to receive the end of service gratuity, which is calculated in the amount of 21 days’ wages for each year of the five years spent in service.
  • In the event that an employee has worked in the Organization for a period exceeding five years, he is entitled to receive the value of the end-of-service gratuity, which is calculated as a wage of 30 days for each additional year of work after the first five years, provided that the financial value of the end-of-service gratuity does not exceed the salary of two years combined.

In the event that the employee terminates his employment contract in the institution, the financial value of the end-of-service gratuity shall be calculated as follows:

  • In the event that the employee submits his resignation from work before the expiry of the term of his work contract or within a period of less than one year, he is not entitled to receive any sums of money. Otherwise, the financial rights are calculated after the resignation as follows:
  • In the event that the employee has worked in the organization for a period ranging from one to three years, he is entitled to receive the end of service gratuity, which is calculated in the amount of one third of the salary for each year of service spent by the employee.
  • In the event that the employee has worked in the Organization for a period ranging from three to five years, he is entitled to receive the value of the end-of-service gratuity, which is calculated at the value of two-thirds of the salary for every 21 days of work for the year spent by the employee in service.
  • In the event that the employee has worked in the Organization for a period exceeding five years, he is entitled to receive the value of the end-of-service benefit, which is calculated in the full basic salary for every 21 working days for each additional year of work after the first five years, provided that the financial value of the end-of-service benefit does not exceed two years’ salary together

The method of calculating the end of service gratuity in the State of Kuwait

  • In the State of Kuwait, there is a special law for calculating the financial value of the end-of-service benefits obtained by workers in the State of Kuwait, which differs significantly from other Arab countries as follows:
  • Whoever desires to receive an end-of-service gratuity during the first five years of work, he shall receive a wage of ten days, while in the following years he shall receive a wage of fifteen days, in relation to the sectoral work system.
  • While workers with monthly salaries receive a value of fifteen days’ wages for the first five years, in addition to a full month’s wages for each of the years following the first five years.

How to calculate the end of service in the private sector

The labor law in Saudi Arabia states that private sector employees are entitled to an end-of-service gratuity equal to half a month’s wages for each year of the first five years of work, in addition to a full month’s wages for each of the following years of work.

The wages of workers in the private sector are calculated based on the financial value of their last monthly salaries for each employee. However, the end-of-service gratuity differs in the event the worker’s service period ends due to his resignation from work. The entitlements of the private sector employee are as follows in the case of a resignation request:

  • In the event that the employee has worked in the organization for a period ranging from one to three years, he is entitled to receive the end of service gratuity, which is calculated in the amount of one third of the end of service gratuity.
  • In the event that the employee has worked in the Organization for a period ranging from three to five years, he is entitled to receive the value of the end-of-service gratuity, which is calculated at the value of two-thirds of the financial value specified for the end-of-service gratuity. .
  • In the event that the employee has worked in the Organization for a period exceeding five years, he is entitled to receive the value of the end-of-service gratuity, which is calculated in the full basic salary for every 21 working days for each additional year of work after the first five years.

Conditions for entitlement to end of service benefits in the private sector

According to the Saudi labor law in the private sector, the following conditions are required for workers in the private sector to receive an end of service gratuity:

  • That the work contract concluded between the worker and the employer be terminated due to the occurrence of one of the reasons found in the Saudi Labor Law.
  • It is also required that the worker has spent at least two years working within the private sector institution.
  • In the case of fixed-term private sector contracts, if the work contract is terminated by agreement between the worker and the employer in writing, the worker in this case is entitled to receive an end-of-service gratuity according to the period during which he continued to work within the institution.
  • A working woman is entitled to a full end-of-service gratuity if she wishes to terminate the employment contract within a period of six months from the date of her marriage, or within three months from the date of giving birth to her child.
  • The end-of-service gratuity is determined according to the other salary that the worker was receiving within the institution.
  • Fixed bonuses and allowances are also calculated within the financial value of the end-of-service gratuity, while the variable commissions and allowances are not calculated within the end-of-service gratuity, if there is no agreement between the employer and the worker on calculating their value.
  • The value of half of the monthly salary is calculated for each year of the worker’s service in the institution in the event that he continues with the worker for at least two to five years at work.
  • A full monthly salary wage is calculated for each year of work in the event that the worker continues to work within the institution for a period exceeding five years.

In this way, we have shown you in detail the method of calculating the end-of-service gratuity for public sector employees in some Arab countries, led by the Kingdom of Saudi Arabia, and all the information related to the reward. For more inquiries, follow us on the information store website.