Employee End of Service Benefits Policy
The end of service benefits policy is more than just a legal formality; it is a structured approach to recognizing employees' contributions, ensuring that both the employer's and employee's best interests are taken into account. It clarifies the end of service calculation base, full\ partial entitlement cases, its relation with contract types, and calculation and payment responsibility.
Created by
Naif O. Alawbathani
|
Human Resources Adviser
Written by HR experts Fully customizable Saudi labor law ComplaintShare the calculator with an HR college
What’s included in the end of service benefits policy?
This policy outlines how end-of-service benefits are managed for departing employees. It serves as a guide for both the company and employees.
The primary purpose of the end of service benefits policy is to provide crucial financial support to employees as they transition to a new role. It’s understood that this can be a challenging time, and this gratuity is designed to offer assistance when it's most needed.
The policy details the specific conditions an employee must meet to be eligible for full or partial benefits. It also thoroughly explains how to calculate end of service benefits, including how various factors such as allowances impact the final amount.
Furthermore, it established a clear timeframe for employees to receive their benefits. This ensures that any outstanding responsibilities from the contractual relationship, such as returning company equipments, are settled before the payment is disbursed. This approach safeguards the rights of both parties involved.
Finally, this end of service benefits policy explicitly affirms commitment to complying with all relevant end of service benefits Saudi law articles.
End of Service Benefits Policy - Table of contents
1. Overview
2. Objectives
3. End of Service Benefits (ESB)
4. Full Entitlement of ESB
5. Partial ESB Entitlement (Resignation)
6. Non-Entitlement to ESB
7. Contract Types & ESB Entitlement
8. Continuous Service
9. ESB Calculation and Payment
10. Legal Compliance
Why do you need an end of service benefits policy?
Reflecting the company's commitment to employee welfare.
Maintaining a positive company reputation both internally and externally.
Showing the company’s care about its people, even when difficult decisions must be made.
Reducing the likelihood of potential legal disputes.
How do you use the model?
Download the template and review the content.
Customize it with name, logo and legal entitlement rules and calculation method.
Add it to employee handbooks and employment contracts.
Ensure compliance by getting the end of service benefits policy reviewed by a legal/HR expert.
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FAQ
How to get end of service benefits in Saudi Arabia?
Using Jisr end of service benefits calculator is the easiest way to calculate end of service benefits in KSA, it’s free and compliant with Saudi Labor Law.
Just add basic information, such as contract type, start and end date, reason for contract termination, employee’s salary. The calculator will automatically and accurately compute the end of service benefits.
How are end of service benefits calculated?
There is no specific formula to calculate end of service benefits. However, the calculation of end of service benefits in Saudi Arabia is based on four key rules:
Employee’s actual wage is the basic wage plus all other due increments including, allowances, commission, rewards.. etc.
End of service benefits are equivalent to half a month's wage for each of the first five years of service.
For each subsequent year, end of service benefits are equivalent to one month's wage.
For portions of a year, the benefits are calculated in proportion to the time spent in service.
What is end of service benefits in KSA?
End of service benefits in Saudi labor law is an amount the employer pays to the employee upon the end of the employment relation. It is designed to offer financial security and assistance as employees transition out of their jobs. It is basically based on employees wage and length of service.
What is the role of HR in managing employees end of service benefits?
HR can manage employees end of service benefits in a smooth positive way by doing this:
Maintaining accurate records such as contracts, payslips, leave requests, salary increases.
Ensuring the due amount is calculated correctly and paid into the appropriate account on time.
Informing employees about the end of service benefits policy.
Staying up-to-date on changing labor regulations to avoid legal liabilities.
Handling any employee complaints around benefits eligibility, calculations, or payment.
Who is entitled to end of service benefits in Saudi Arabia?
Generally, any employee who has completed two years of continuous service with an employer is eligible for end of service benefits upon termination, except in the following cases:
The employee assaults the employer, the manager incharge, or any of his superiors.
The employee fails to perform his main obligations or obeying orders, or if he fails to observe safety instructions .
The employee has committed misconduct or an act infringing on honesty or integrity.
The employee deliberately commits or omits any act with the intent to cause material loss to the employer.
The employee has committed forgery to obtain the job.
The employee is absent for more than 30 days in one contractual year or for more than 15 consecutive days.
The employee has unlawfully taken advantage of his position for personal gain.
The employee has disclosed trade secrets.