HOW TO CALCULATE END SERVICE BENEFITS IN KSA
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Saudi Labor Law
The Saudi Labor Law states laws and regulations for employment. The law has articles and clauses which define rights of the employer and employee both. It is very necessary for both the employer and employee to understand the labor law before starting working in Kingdom of Saudi Arabia. A large number of people working in Saudi Arabia are expatriates who usually find it convenient to keep notable human resource consulting companies in loop for various HR solutions.
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What is Gratuity?
Gratuity is a monetary token of acknowledgment paid to an employee by the company for their commitment, diligence, and efforts they have contributed during the tenure of service. This amount is usually paid after the employment ends – whether the employee resigns or gets terminated by the company. According to Saudi labor law, if an employee wishes to resign, he is entitled to receive gratuity from the company after the completion of two years in the same company. However, if the employee is terminated, he is entitled to receive a full accumulation of gratuity in case of serving more than a year in the same company. Gratuity is considered as a liability to the employer.
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Factors Affecting Gratuity Calculations in Saudi Arabia?
In case of Resignation
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the service tenure is less than two years then no gratuity shall be paid.
If the service tenure is between two and five years, then one third of the gratuity shall be paid
If the service tenure is between five and ten years, twothirds of the gratuity shall be paid.
If the service period is more than 10 years then complete gratuity shall be paid.
In case of Termination
If the service tenure is under one year then no gratuity shall be paid.
If the service tenure is between one and five years, half salary per month per year shall be paid.
If the service tenure is more than five years, full gratuity shall be paid.
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Gratuity
How to calculate the gratuity in
Service Tenure
than 5 years 5 years and above
Monthly Salary (SAR) 10,000 10,000
Payroll Month Nov-19 Nov-19
No. of years worked 4.5 7.5 Wage per day 333.33 333.33
Gratuity days 62.05 151.5
First 5 years (1/2 monthly salary per year) 20,671.23 25,000
years (1 monthly salary per year)
Gratuity
25500
Less
5+
NIL
Total
20,671.23 50,500
Saudi Arabia? https://payrollmiddleeast.com/
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