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Saudi labor law does not specify which workers qualify for gratuity accrual and payment. Which workers are eligible for gratuity payment?.The settlement is dependent on some factors as we will see below. Gratuity accrues from the first day of employment up to the last working day. When does the employee become eligible for gratuity accrual?.Gratuity payment is a liability to the employer which accrues as the employee service period progresses.
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Gratuity is a monetary payment eligible to an employee as a lump sum at the end of his tenure provided that the period of service exceeds one year. Here our payroll experts in KSA, explain in detail the gratuity policy in KSA, along with some sample gratuity calculations. In the case of termination, the employee is entitled to a full accrual if the service period is more than one year. In KSA, an employee is entitled to an end of service benefit upon completion of two years of service if he is resigning from work. It is usually calculated at the time of resignation or termination. Gratuity is a token of appreciation for all the hard work and commitment an employee has shown towards one’s workplace. The end-of-service award shall be calculated on the basis of the last wage and the worker shall be entitled to an end-of-service award for the portions of the year in proportion to the time spent on the job. Upon the end of the work relation, the employer shall pay the worker an end-of-service award of a half-month wage for each of the first five years and a one-month wage for each of the following years. Article 84 of the KSA Labor law states as follows regarding end-of-service settlement
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