Leaving your job in Saudi Arabia is a major life transition. One of the most stressful parts is figuring out exactly what you are owed when your employment ends. Between End of Service Benefit, unpaid salary, unused leave days, and the air ticket home — the confusion adds up fast.
Welcome to the complete guide on . This guide covers everything you need to know: the legal basis under Saudi Labor Law Articles 76, 77, 78, 84, and 85, step-by-step calculation formulas, real-life examples, common mistakes, and how to claim what is rightfully yours.
Use our free Final Settlement Calculator to estimate your total dues instantly — including EOSB, unpaid salary, unused leave, and air ticket value.
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Try it nowWhat is Final Settlement in Saudi Arabia?
Final Settlement (also called "End of Service Settlement") is the total amount an employer must pay an employee when their employment contract ends — whether by resignation, termination, or contract expiry. It is governed by the Saudi Labor Law, specifically Articles 76, 77, 78, 84, and 85 of Royal Decree No. M/51.
Many expats confuse "Final Settlement" with "EOSB" (End of Service Benefit). While EOSB is the most significant component, the final settlement includes multiple items beyond just the gratuity. Understanding each component is critical to ensuring you receive every Riyal you are entitled to.
Legal Basis
- Article 76: Entitlement to annual leave and compensation for unused leave days upon termination.
- Article 77: Rules around notice period and termination procedures.
- Article 78: Employee rights when employer breaches contract terms.
- Article 84: EOSB calculation — half-month salary for first 5 years, full month salary per year thereafter.
- Article 85: Reduction rules for EOSB when employee resigns before contract end.
Components of Final Settlement (2026 Rules)
Your final settlement comprises up to five distinct components. Here is what each one means and how it is calculated:
1. End of Service Benefit (EOSB)
Calculated under Article 84 of Saudi Labor Law. This is the lump-sum gratuity payment based on your years of service and basic salary.
- First 5 years: Half a month of basic salary per year
- After 5 years: One full month of basic salary per year
- Partial years: Calculated proportionally
- Resignation: Reduction per Article 85 (0% under 2 years, 1/3 for 2-5 years, 2/3 for 5-10 years, 100% after 10 years)
2. Unpaid Salary
If you worked days in your final month that have not been paid yet, those days must be included. Formula: Monthly Salary ÷ 30 × Number of Unpaid Days.
3. Unused Annual Leave Pay
Under Article 76, any annual leave days you have not taken must be compensated. This includes leave accrued but not yet used.
Formula: (Monthly Salary ÷ 30) × Number of Unused Leave Days.
4. Air Ticket Entitlement
This applies to all expatriates on employment contracts.
- Typically includes employee only (family coverage depends on contract)
- Applies to resignation and termination cases alike
5. Other Benefits
Depending on your contract, additional items may include: unpaid bonuses, commission payments, housing allowance arrears, transportation allowance, and any other contractual benefits that accrued but were not paid.
Air Ticket Rules in Detail
Here is a detailed breakdown of the rules:
Who is Eligible?
This right is protected under Saudi Labor Law and standard Ministry of Human Resources regulations.
Does it Apply to Family Members?
Whether it extends to spouse and children depends entirely on your employment contract. Check your contract carefully.
Cash Equivalent if Ticket is Not Provided
Resignation vs Termination
Always review your contract and consult with the Ministry if there is a dispute.
Step-by-Step Final Settlement Calculation Formula
Use this five-step method to calculate your final settlement:
- Step 1: Calculate EOSB
Full EOSB = (Basic Salary ÷ 2) × 5 + Basic Salary × (Years Beyond 5) + Proportional Partial Year. Then apply Article 85 reduction if resigning.
- Step 2: Add Unpaid Salary
Unpaid Salary = (Monthly Salary ÷ 30) × Unpaid Working Days.
- Step 3: Add Unused Leave Pay
Unused Leave Pay = (Monthly Salary ÷ 30) × Unused Leave Days.
- Step 5: Total Final Settlement
Real-Life Calculation Examples
Example 1: Employee Resigns After 5 Years
Years of Service: 5 years
Unpaid Days: 10 days
Unused Leave Days: 15 days
Step 1 — EOSB Calculation:
Article 85 (resignation at 5 years, 2-5 bracket): 1/3 of full EOSB
EOSB = 30,000 × 1/3 = 10,000 SAR
Step 2 — Unpaid Salary:
(12,000 ÷ 30) × 10 = 400 × 10 = 4,000 SAR
Step 3 — Unused Leave Pay:
(12,000 ÷ 30) × 15 = 400 × 15 = 6,000 SAR
Total Final Settlement:
Example 2: Employee Terminated After 8 Years
Basic Salary: 18,000 SAR/month
Years of Service: 8 years
Unpaid Days: 0 (fully paid)
Unused Leave Days: 20 days
Step 1 — EOSB Calculation (Termination = Full EOSB):
Years 6-8: 3 × 18,000 = 54,000 SAR
99,000 SAR
(No Article 85 reduction because employee was terminated)
Step 2 — Unpaid Salary:
0 days = 0 SAR
Step 3 — Unused Leave Pay:
(18,000 ÷ 30) × 20 = 600 × 20 =
3,000 SAR
Total Final Settlement:
114,000 SAR
Special Cases & Edge Scenarios
What if Contract Ends Naturally?
The same rules apply as with termination.
What if Employee Absconds (Huroob)?
If you abscond (Huroob), your employer can report you to the authorities. You may still claim unpaid salary for days actually worked. Legal disputes in Huroob cases are common and often require labor court intervention.
What if Company Closes Down?
If the company closes or goes bankrupt, your final settlement is still legally owed. The Ministry of Human Resources can help enforce payment through the Wage Protection System (WPS) and bank guarantees. In bankruptcy cases, employee salaries and EOSB are priority claims.
Partial Year Calculations
Partial years are always calculated proportionally. For example, 6 months beyond 5 full years equals 0.5 × (annual EOSB rate) for that partial period. Unused leave is calculated day-by-day.
Disputes with Employer
If you disagree with the final settlement amount your employer provides, do not sign any settlement documents. Request a detailed breakdown in writing. If unresolved, file a case with the Labor Court or use the Qiwa platform for dispute resolution. The Ministry of Human Resources offers free mediation services.
Common Mistakes When Calculating Final Settlement
- Mistake 1: Forgetting Unused Leave Pay
Many expats leave without claiming compensation for unused annual leave days. Under Article 76, this is a separate entitlement from EOSB and can add thousands of Riyals to your settlement.
Do not forget to include this in your final demand.
- Mistake 3: Using Total Salary Instead of Basic Salary for EOSB
EOSB is calculated on basic salary only — not total salary including allowances. Using total salary will overestimate your entitlement and lead to disappointment.
- Mistake 4: Not Checking Contract Terms
Your specific employment contract may include additional benefits or different rules. Always verify your contract language before calculating your final settlement.
How to Claim Your Final Settlement
- Step 1: Calculate your expected amount using our Final Settlement Calculator.
- Step 2: Submit a formal written request to HR or your employer with the detailed breakdown.
- Step 3: Negotiate if needed. Provide supporting evidence (contract, pay slips, ticket quotes).
- Step 4: If employer refuses or delays, file a complaint via Qiwa or visit the Ministry of Human Resources office.
- Step 5: As a last resort, file a case with the Labor Court. The process typically resolves within 2-4 weeks.
Under Article 87 of the Saudi Labor Law, the employer must pay all end-of-service benefits and final dues within 5 days from the date of contract termination or the end of the notice period. If the delay exceeds this period, penalties may apply to the employer. HR teams often verify their company's Nitaqat band with the free simulator before finalizing settlement dates.
How to Use the Sauditoolhub Final Settlement Calculator
Sauditoolhub Final Settlement Calculator
Our free calculator combines all five components of your final settlement into one simple tool. Enter your basic salary, years of service, unpaid days, unused leave days, and air ticket value — and get an instant estimate.
- Free — no registration required
- Instant results in seconds
- Supports all 5 languages
- Private — no data saved
The 4 Pillars of a Saudi Final Settlement
A Saudi final settlement is not one payment. It is a bundle of four separate entitlements, and each one is calculated by its own rule. Treating them as one lump sum is how workers get shortchanged, because payroll will happily present one low number and call it "the settlement."
The four mandatory components are:
- Pro-rated salary for your final partial month of work, from the first day of that month to your actual termination date.
- End of Service Benefit (EOSB) — the gratuity accrued under Article 84, adjusted by your reason for leaving under Article 85.
- Accrued but unused annual leave pay under Article 109, paid as cash compensation for vacation days you earned but never took.
- under Article 40, which the employer must cover when you leave the Kingdom.
Missing pillars are the most common error in real settlements. A worker who has taken every vacation day still gets pillars 1, 2, and 4. A worker leaving at contract end without any unpaid days still gets 2 and 4. Only by checking all four can you know whether the number on the page is complete.
Accrued Leave Pay: How to Calculate Your Unused Vacation Days
You are entitled to cash for every annual leave day you earned and did not use, on top of your EOSB. This is the pillar most often missing from settlements, because payroll assumes workers will not check their leave ledger. You should check it before signing.
The Legal Entitlement (Article 109)
Article 109 of the Saudi Labor Law gives you a minimum of 21 days of paid annual leave for each of your first five years of service, and 30 days per year after that. You cannot be paid less than this by contract. This accrues against your ledger the moment you complete each month of service, so a worker who resigns after ten months has earned about ten months' worth of leave, not zero.
The split matters for long-serving staff. At year five your entitlement jumps from 21 to 30 days. A worker in their sixth year earns one more full week of leave per year than a worker in their first year, and both carry those days as a cash claim if they go unused.
How Unused Leave Is Paid Out
Upon termination, the employer must pay cash compensation for every unused leave day, calculated on your last drawn wage. That is your final basic salary at the moment of departure, not an average and not the lower figure from years ago. If your salary rose over your contract, the higher final figure is the one used.
The Daily Rate comes from dividing your monthly basic salary by 30. This is the standard convention across MHRSD processes and labor courts. Your employer cannot substitute a smaller daily figure or ignore flushing days from one year into the next.
The "Use It or Lose It" Myth
Employers cannot legally force you to forfeit unused leave just because you resign. The "use it or lose it" rule is a myth for paid statutory leave in KSA. Your accrued days are a debt the employer owes you, and it survives your resignation.
The only true exception is an explicit written waiver where you knowingly abandon the claim — and even then, Article 8 makes any waiver of statutory rights null and void. A signature on a form that says you "voluntarily forgo all outstanding leave" carries little legal weight and is routinely challenged. Never volunteer to cancel your days.
Calculation Formula
Leave Pay = (Monthly Basic Salary ÷ 30) × Number of Unused Leave Days
Example: A worker with 5,000 SAR basic salary and 15 unused days is owed 15 × (5,000 ÷ 30) = 15 × 166.67 = in leave pay alone. That is real money most workers never claim because nobody offered it on the first pay alert.
Leave days do not stop accruing the month you resign. If you handed in your notice on the fifteenth of the month, you still earn leave for the days you actually worked up to your last day. Payroll sometimes ignores this trailing accrual, so count from your contract start date to your true last working day, then deduct only the days you genuinely used. A two-week window of earned-but-unpaid leave is a common silent underpayment. Keep your own ledger of approved leave dates and compare it line by line against what HR prints on the settlement sheet.
Article 40: Who Pays for the Final Exit Visa and Repatriation Ticket?
Under Article 40 of the Saudi Labor Law, when your contract ends and you are leaving the Kingdom, your employer must pay for your return ticket to your home country, or to the place where you were originally recruited. This is a hard legal obligation, not a favour, and it covers the flight even when it is an exit-visa at the end of a resignation.
The Employer's Legal Obligation
The obligation activates the moment your employment relationship ends through termination, contract expiry, or resignation leading to departure. The employer must provide the ticket and bear the cost of the final exit formalities. A sizable number of employers test this by quietly proposing you "book your own ticket and we will reimburse later," a promise that frequently evaporates after your departure.
The correct position is simple: the ticket is theirs to provide. If they ask you to pay and then reimburse, get the reimbursement promise in writing before paying a single riyal, or refuse and ask them to book it directly.
Exceptions to the Rule
The responsibility does not apply in four specific situations:
- Iqama transfer:The old employer is released.
- Written contract agreement: If you explicitly agreed in the contract to bear the cost yourself. Courts treat these clauses strictly and often overturn them as unfair, but the clause exists.
- Absconding (Huroob):
- Gross misconduct (Article 80):
Note the everyday rule: a normal resignation or contract expiry keeps the employer's ticket duty fully intact. Do not let an employer treat a clean resignation as though it were a Huroob just to dodge the flight cost.
Exit Visa Fees
When the termination is initiated by the employer, or the contract simply expires, the employer also covers the processing fees for the final exit visa. This includes the official visa fee and the associated administrative charges. If the employer refuses, the MHRSD labor office and the exit points have mechanisms to override a refused exit on legitimate grounds.
A refused final exit visa is one of the most stressful corners of Saudi employment. When it happens because the employer is withholding out of spite over a dispute, escalate to the labor office rather than accept an unlawful extension of stay. A pending settlement dispute is not legal grounds for blocking your exit.
Legal vs. Illegal Deductions: What Can Your Employer Cut?
Not every deduction your employer wants is lawful. Saudi law draws a clear line between legitimate recovery and hidden theft, and knowing the line protects your settlement. The burden of proving a deduction is justified sits firmly with the employer.
Legal Deductions (Articles 96 & 97)
An employer may lawfully deduct only from a short list of defined categories:
- Loan and advance recovery: Repayment of advances or loans the employer genuinely gave you, where the terms were agreed in writing.
- Mistaken overpayments: Wages paid in error that must be clawed back because the money was never actually owed.
- Proven negligence damages: Damages you caused through proven negligence, but these are capped at 5 days' wage per month and must be supported by evidence, not a blanket accusation.
- Any deduction explicitly agreed in writing between you and the employer, within the law's limits.
Even lawful categories have boundaries: a negligence claim needs proof of the act and the harm, and the monthly cap stops the employer from draining your whole gratuity in one line. A general "damages" deduction with no police report, no photos, and no assessment is not legal.
Illegal Deductions (Red Flags)
These are the deductions you should refuse, and note in a written objection before signing anything:
- "Resignation fees" or "notice buyout" charged even though you served your correct notice period. The notice wage is either payable or not based on your notice, not as a fee on top.
- Blanket "equipment damage" fees with no proof, no inventory check, and no reports. These are the most common illegal deduction in KSA settlements.
- "Training cost" recovery unless you signed a specific, legally valid training bond that meets the law's strict conditions.
- Forcing you to pay your own final exit visa when the employer initiated the termination or the contract expired — that cost is theirs under Article 40.
The red-flag pattern to watch: a deduction with no supporting paper, introduced only at the settlement moment. If a cost is not written anywhere in your contract and appears for the first time on your final payslip, demand the legal basis in writing.
Real-World Calculation Examples (Step by Step)
Watch the whole settlement come together with numbers. These two walkthroughs mirror the two most common departures: a clean resignation and an employer termination at final exit.
Scenario A: The Standard Resignation
Given:
Step 1 — End of Service Benefit:
Resignation at 6 years = 2/3 × 17,500 = 11,666.67 SAR
Step 2 — Unused Leave Pay:
15 days × (5,000 ÷ 30) = 15 × 166.67 =
Step 3 — Final 10 days of that month:
10 × (5,000 ÷ 30) = 1,666.67 SAR
Total settlement ≈ 15,833 SAR
Excluding the repatriation flight, which the employer owes separately under Article 40.
Scenario B: The Final Exit (Employer Termination)
Given: Basic salary 4,000 SAR, 30 unused leave days, 3 years, employer termination (full EOSB).
Step 1 — End of Service Benefit (full):
(4,000 ÷ 2 × 3 yrs) = 6,000 SAR
Step 2 — Unused Leave Pay:
30 days × (4,000 ÷ 30) = 4,000 SAR
Step 3 — Repatriation flight (employer pays):
1,500 SAR
Total settlement ≈ 11,500 SAR
Plus your prorated salary for the final partial month on top of these figures.
Both examples share one lesson: EOSB alone is never the full story. Add your leave days and your ticket rights, and the number you walk away with grows meaningfully. Verify each line with a calculator before you accept the HR total.
Frequently Asked Questions
What is included in a final settlement in Saudi Arabia?
A final settlement includes: EOSB (End of Service Benefit), unpaid salary, unused annual leave pay, air ticket to home country, and any other contractual benefits. For EOSB calculation details, see our complete EOSB guide.
How is air ticket calculated in final settlement in Saudi Arabia?
Under Article 40 of the Saudi Labor Law, your employer must provide a return ticket to your home country when your contract ends. The ticket is for economy class to your home country.
Do I get air ticket if I resign in Saudi Arabia?
Yes, your employer must provide a return ticket regardless of whether you resign or are terminated. However, check your employment contract as some employers include conditions for resignation cases.
Is unused leave paid in final settlement Saudi Arabia?
Yes, under Saudi Labor Law Article 76, you are entitled to compensation for unused annual leave days at a rate of your daily salary multiplied by the number of unused days. This is calculated as monthly salary divided by 30, multiplied by unused leave days.
How many days can employer take to pay final settlement in Saudi Arabia?
Under Article 87 of the Saudi Labor Law, the employer must pay all end-of-service benefits and final dues within 5 days from the date of contract termination or the end of the notice period. Delays beyond this period can result in penalties. If your employer delays unreasonably, you can file a complaint with the Ministry of Human Resources.
What if my employer refuses to pay final settlement?
If your employer refuses to pay, file a complaint through Qiwa or the Ministry of Human Resources. You can also approach the Labor Court. Saudi labor laws are pro-employee in this regard, and the ministry can enforce payment through bank transfer guarantees.
Can I get final settlement if I abscond (Huroob)?
If you abscond (Huroob), your employer may report you to the authorities. You may still claim unpaid salary for days actually worked, but legal disputes are common in such cases.
Is EOSB and final settlement the same thing?
No. EOSB (End of Service Benefit) is one component of the final settlement. EOSB is calculated under Article 84/85, while other components have separate rules.
How to calculate final settlement online in Saudi Arabia?
Use the Sauditoolhub Final Settlement Calculator at /final-settlement-calculator. It is free, instant, and requires no signup.
How is unused annual leave calculated in the final settlement in Saudi Arabia?
Unused leave pay = (monthly basic salary ÷ 30) × unused leave days, based on your last drawn wage. Under Article 109 you earn at least 21 days a year for the first five years and 30 days after that.
Does the employer have to pay for my flight ticket when I leave Saudi Arabia?
Yes.
Can my employer deduct money from my final settlement for broken equipment?
Only if the damage is proven and the deduction is capped at 5 days' wage per month under Article 97. A blanket damage fee with no proof, police report, or inventory check is illegal and should be refused.
What happens if my employer refuses to issue my final exit visa?
A settlement dispute is not legal grounds to block your exit. Escalate to the MHRSD labor office, which can override a refused final exit on legitimate grounds while your dues are settled separately.
Is the final settlement paid in cash or bank transfer in KSA?
Settlements must be paid by Wage Protection System (WPS) bank transfer, not cash. A cash settlement with no transfer record is a red flag that weakens your proof if a dispute arises.
Conclusion
Your final settlement in Saudi Arabia is more than just EOSB. Between unpaid salary, unused leave days, and the air ticket home, the total can be significantly higher than many expats expect. Understanding Articles 76, 84, and 85 of the Saudi Labor Law empowers you to negotiate confidently with your employer and ensure you receive every Riyal you are owed.
Bookmark our Final Settlement Calculator for instant estimates. Also explore our EOSB Calculator for gratuity-only calculations, Jawazat Fine Calculator for overstay fines, and the Family Visa Optimizer for dependents fee planning. Visit our Blog for more expat guides.
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