End-of-service settlement template

What an employee is owed on leaving, on one signed sheet: the service, the wage, the end-of-service award under the Labour Law, the unused leave paid out and the total due.

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End-of-Service Settlement

Number
EOS-2026-0007
Date
2026-11-02
Reason for leaving
End of contract
Date of joining
2021-03-01
Last day of service
2026-10-31
Length of service
5 years, 245 days
Company name
Al Noor Trading Est.
Address
King Fahd Road, Riyadh 12345
CR number
1010123456
Employee
Mohammed Al-Ahmad
Employee ID
EMP-014
ID / Iqama number
1012345678
Job title
Accountant
Basic salary
8,000.00
Housing allowance
2,000.00
Transport and other allowances
500.00
ItemComputationDueDeductions
End-of-service award (Labour Law art. 84)10,000.00 × (5 × ½ month + 245 ÷ 365 × 1 month)31,712.33
Unused annual leave paid out (art. 111)12 days × 10,500.00 ÷ 304,200.00
Other dues or deductions under the contract
Total35,912.330.00
Total due before deductions
35,912.33 SAR
Total deductions
0.00 SAR
Total due
35,912.33 SAR

Al Noor Trading Est. confirms that Mohammed Al-Ahmad, holder of ID / Iqama number 1012345678, served from 2021-03-01 to 2026-10-31, and that the amounts above are due to them on leaving, computed as shown.

I, Mohammed Al-Ahmad, acknowledge that I have received the total due shown above.

Prepared byApproved byEmployee's signature and date

Labour Law art. 84: half a month's wage for each of the first five years and a full month for each year after, parts of a year in proportion, on the last wage, basic plus housing. On resignation (art. 85) a third is paid after two years, two thirds after five and all after ten; had this employee resigned, the award would be 21,141.55. Unused annual leave is paid at the wage on leaving (art. 111): here a day is the monthly wage with allowances over thirty.

An estimate on the statutory rules with the figures shown. Leave balances, notice, deductions and a contract's own terms change the amount; confirm with the labour office's calculator or an adviser.

A template from Aqid ERP — aqiderp.com. Replace the sample figures with your own.

The paper that closes an employee's account

An end-of-service settlement (مخالصة نهاية الخدمة) sets out what an employee is owed on leaving: the dates and the reason, the length of service, the wage the award is computed on, the end-of-service award under the Labour Law, the unused annual leave paid out, and the total due. The employer signs it, and the employee signs for the amount received.

  • A number and a date, the reason for leaving, the date of joining and the last day of service.
  • The employee's name, number, ID or Iqama number and job title.
  • The basic salary, housing allowance and other allowances on the last day.
  • Each amount due with how it was computed, and any deductions.
  • The total due, and the signatures of the employer and of the employee on receipt.

The rules the sheet applies

Article 84 of the Labour Law: half a month's wage for each of the first five years and a full month for each year after, on the last wage, which in Saudi Arabia is basic plus housing; parts of a year in proportion. Article 85: on resignation a third is paid after two years, two thirds after five and all after ten. Unused annual leave is paid at the wage on leaving (art. 111). The award is owed to Saudis and expatriates alike.

Aqid ERP's settlement counts the service by anniversaries of the joining date, with the last day of work as a day of service, and the part of a year in days over 365; it pays a day of unused leave at the monthly wage, allowances included, over thirty. The sample uses the same arithmetic.

The sample, line by line

An accountant joined on 1 March 2021 and left at the end of his contract on 31 October 2026: five years and 245 days. The award is computed on 8,000.00 basic plus 2,000.00 housing; twelve days of leave are unused, paid on the monthly wage of 10,500.00 with transport.

First five years: 5 × ½ × 10,000.0025,000.00
245 days after: 245 ÷ 365 × 10,000.006,712.33
End-of-service award31,712.33
Unused leave: 12 × 10,500.00 ÷ 304,200.00
Total due35,912.33
Had he resigned: two thirds of the award21,141.55

Questions

How is end-of-service gratuity calculated in Saudi Arabia?

Half a month's wage for each of the first five years and a full month for each year after, on the last wage (basic plus housing), parts of a year in proportion. On resignation, a third is paid after two years, two thirds after five, and all after ten (Labour Law art. 84–85).

Is the award computed on the basic wage or the full salary?

In Saudi Arabia on basic plus housing; transport and other allowances are outside it. In Aqid ERP the unused leave is paid on the full monthly wage, allowances included, which is why the sample uses two different wages.

Does resignation reduce the award?

Yes, by thirds depending on the years served: nothing under two years, a third after two, two thirds after five and the whole after ten. The sample's employee, at five years and 245 days, would receive two thirds: 21,141.55 instead of 31,712.33.

Is a Saudi national paid the award?

Yes. In Saudi Arabia the award is owed to nationals and expatriates alike.

Is the result a final settlement?

No. It is an estimate on the statutory rules with the figures entered. Leave balances, notice, deductions and a contract's own terms change the amount; confirm with the labour office's calculator or an adviser.

Related

End of service in Aqid ERP payrollPayslip templateSalary certificate templateAttendance sheet templateSalary scale templatePayroll register templateAll templatesGratuity calculator

Terms used on this page

End-of-service benefitProvisionWage Protection System (WPS)GOSI contributionsAll terms

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