Saudi Civil Service End of Service Gratuity?

Quick Answer

End of service gratuity in the Saudi civil service is not an automatic entitlement for every civil servant. The civil service retirement system provides a monthly pension for those who complete 25 years of service or more (or reach age sixty), while those who leave service before that are entitled to an "end of service gratuity" calculated as a percentage of the last basic salary for each year. Those who resign before 10 years of service receive only their retirement contributions (9% of the basic salary monthly) without additional gratuity. Details differ depending on the reason for leaving service.

When Do You Qualify for Gratuity Instead of a Pension?

The Civil Service Retirement System issued by Royal Decree No. M/41 and its amendments is the primary reference here, administered by the General Organization for Social Insurance (PPA). The simple rule: the monthly pension requires a long service period, and the gratuity is an alternative for those who have not reached that duration.

• Less than 10 years of service and you resigned voluntarily: your contributions are returned only. No gratuity.
• From 10 to less than 25 years and you left service for reasons other than disability or death: you are entitled to end of service gratuity for a Saudi civil service employee with progressive rates. [1]
• 25 years or more, or reaching age sixty, or disability, or death: monthly pension, no gratuity.

A point many overlook: those dismissed for disciplinary reasons are treated differently and may be deprived of some benefits according to the committee's decision.

How Is the Gratuity Calculated?

The basic formula is linked to the last basic salary (excluding allowances) and the number of years of service counted. According to Article (19) of the Civil Service Retirement System, the gratuity is calculated approximately as follows:

• For the first 5 years: one month's salary for each year.
• For the next 5 years: one and a half months' salary for each year.
• For each year thereafter: two months' salary for each year. [1][2]

Quick example: An employee who served 15 years with a last basic salary of 10,000 riyals.

• First 5 years: 5 × 10,000 = 50,000
• Next 5 years: 5 × 15,000 = 75,000
• Last 5 years: 5 × 20,000 = 100,000
• Total: 225,000 riyals.

This is an illustrative estimate. The actual figure is issued by the General Organization for Social Insurance after verifying the service record and contributions.

Caution: The salary used in the calculation is the last basic salary only. Transportation allowance, housing allowance, in-kind allowance — all are outside the formula. This surprises many when receiving the transfer.

The Difference Between Government and Private Sector Employees

A common confusion worth clarifying. End of service gratuity in the Saudi civil service is subject to the Civil Service Retirement System and administered by the General Organization for Social Insurance. However, a private sector employee is subject to the Labor System (Royal Decree M/51) which requires the employer to pay end of service gratuity directly: half a month for each year of the first five years, and one full month for each year thereafter, according to Article (84) of the Labor System. [3]

The situation also differs for those enrolled in the General Organization for Social Insurance (GOSI) who have an independent pension and gratuity system.

For more details on labor rights, see our guide on employment law questions.

Steps for Gratuity Disbursement

1. Submit a request to terminate service through the government agency you work for.
2. The agency submits the service data to the General Organization for Social Insurance electronically.
3. The Organization verifies the period and contributions and issues an entitlement decision.
4. The amount is transferred to your registered bank account within a period usually between 30 and 90 days from file completion.

To inquire or track your request: General Organization for Social Insurance portal pension.gov.sa, or call 8001243040. [2]

If payment is delayed without justification, you have the right to contact the Organization in writing, then resort to the Board of Grievances if necessary.

References

[1] Civil Service Retirement System, issued by Royal Decree No. M/41 and its amendments — Articles (18) and (19). [2] General Organization for Social Insurance, "End of Service Gratuity", pension.gov.sa. [3] Saudi Labor System, Royal Decree No. M/51, Article (84) — for comparison with the private sector.