How Are End of Service Benefits Calculated for Domestic Workers in Saudi Arabia?

Ending a domestic worker’s contract may seem like a simple administrative step, but this stage involves several rights and obligations that employers should understand before the employment relationship ends. One of the most common questions among families in Saudi Arabia is: Is a domestic worker entitled to an end of service benefit? How is it calculated? And when should it be paid?

In this guide fromAl Nojoom Distinguished Recruitment Office, we explain everything you need to know about end of service benefits for domestic workers in Saudi Arabia, including eligibility requirements, calculation methods, practical examples, payment deadlines, and common mistakes to avoid.

What Is the End of Service Benefit for Domestic Workers?

The end of service benefit is one of the financial entitlements that a domestic worker may receive when the employment contract ends, provided that the eligibility conditions stated in the regulations governing domestic workers are met.

These regulations cover several categories of workers who provide direct or indirect household services to an employer or members of the employer’s family under their supervision and direction.

This may include domestic workers, private drivers, gardeners, home guards, and other workers who fall under the regulatory definition of a domestic worker.

It is important not to treat the end of service benefit as a fixed amount that applies equally to every worker. The amount mainly depends on:

• The worker’s qualifying period of service.

• The worker’s final wage.

• The number of completed consecutive four-year periods with the employer.

• The date on which the employment relationship ends.

Therefore, identifying the worker’s final salary and actual length of service is the first step toward calculating the benefit correctly.

Is a Domestic Worker Entitled to an End of Service Benefit in Saudi Arabia?

Yes. The regulations provide that a domestic worker is entitled to an end of service benefit when the employment relationship ends, subject to the applicable eligibility conditions.

The benefit is calculated as one month’s wage for every four consecutive years the domestic worker has spent with the employer, using the worker’s final wage as the basis for calculation.

This means that entitlement is linked to the length of continuous service with the employer according to the regulatory requirements. It does not automatically apply in the same way to every contract simply because the contract has ended.

Simple Example

If a domestic worker has completed 4 consecutive years with the employer and her final monthly wage is SAR 2,000, the benefit for that four-year period would be:

SAR 2,000 = one month’s wage

If the worker completes 8 consecutive years, the calculation would be:

SAR 2,000 × 2 = SAR 4,000

If the worker completes 12 consecutive years, the calculation would be:

SAR 2,000 × 3 = SAR 6,000

These examples illustrate the basic calculation method. However, the actual contract, individual circumstances, and regulations in effect when the employment relationship ends should always be taken into account.

Which Wage Is Used to Calculate the Benefit?

One of the most important points to understand is that the regulations specify the worker’s final wage as the basis for calculating the end of service benefit.

Therefore, if the worker’s salary changed during the years of employment, this does not necessarily mean that each period should be calculated using the salary paid at that time.

The rule stated in Article 22 establishes the final wage as the basis for calculating the benefit.

Practical Example

Suppose a domestic worker began employment with a monthly salary of SAR 1,500, and her salary later increased to SAR 2,000.

If the employment relationship ends after she completes the required qualifying period, the final salary of SAR 2,000 would be used as the basis for calculating the end of service benefit under the relevant regulation, rather than the earlier salary.

This is one of the areas where calculation mistakes can easily occur when employers try to determine the amount manually.

When Is a Domestic Worker Entitled to the End of Service Benefit?

The benefit is linked to the end of the employment contract and the employment relationship, together with the completion of the required period of service.

According to the Ministry of Human Resources and Social Development, the benefit becomes payable when the domestic employment contract ends and should be paid when the employment relationship is terminated.

Situations in which a domestic employment relationship may end include:

• Expiry of the contract term.

• Mutual agreement between both parties to terminate the contract according to the applicable rules.

• Other circumstances such as the death of one of the parties or a force majeure event that prevents the continuation of the employment relationship.

For this reason, the reason for ending the contract should not be considered in isolation. The full circumstances of the case should be reviewed to determine the rights and obligations that apply.

What Happens If the Contract Ends Before Four Years?

This is one of the points that requires careful attention.

The regulatory wording calculates the end of service benefit on the basis of one month’s wage for every four consecutive years completed by the domestic worker with the employer.

Therefore, if the period of service is less than four years, an employer should not automatically assume that a full month’s wage is payable simply because the employment relationship has ended.

If special circumstances, contractual agreements, or other financial entitlements apply when the contract ends, each entitlement should be treated separately and should not automatically be considered part of the end of service benefit.

For this reason, the employment contract, starting date, and termination date should all be reviewed before making the final calculation.

Is the End of Service Benefit Different From Other Financial Entitlements?

Yes. This is an important distinction.

The end of service benefit is not necessarily the only amount owed to a domestic worker when the employment relationship ends.

Depending on the situation, the worker may also be entitled to other payments, such as wages due up to the final working day or other rights provided under the contract or relevant regulations.

Article 23 requires the employer to settle the domestic worker’s rights within the specified legal time limits.

This means that ending a domestic employment contract involves more than calculating the end of service benefit. A complete settlement of all applicable financial rights may also be required.

When Must the Employer Settle the Domestic Worker’s Rights?

Article 23 of the regulations sets out clear deadlines for settling financial rights:

• If the domestic worker’s service ends: the employer must pay the worker’s wages and settle the worker’s rights within no more than one week from the date the domestic employment contract ends.

• If the domestic worker terminates the contract: the employer must settle all of the worker’s financial rights within no more than two weeks.

The regulations also allow the employer, subject to the applicable rules, to deduct any debt owed by the domestic worker to the employer as a result of the employment relationship from the amounts payable to the worker.

What Are the Most Common Mistakes When Calculating End of Service Benefits?

Employers may make several simple mistakes when calculating end of service benefits themselves. Common examples include:

1. Using an old salary instead of the final wage: The regulations use the worker’s final wage as the basis for calculating the benefit.

2. Using the private-sector employee formula: Domestic workers are governed by specific regulations, so the calculation rules applicable to other employees should not automatically be applied.

3. Confusing the benefit with the full settlement of rights: The end of service benefit is only one financial entitlement. Other amounts may also need to be settled.

4. Ignoring the actual start date of employment: The number of consecutive years of service is essential to the calculation.

5. Delaying the final settlement: The regulations specify clear deadlines for settling the worker’s financial rights after the employment relationship ends.

How Can Employers End a Domestic Employment Contract Properly?

Properly ending a domestic employment relationship is not only about paying the amounts owed at the end of the contract. Good organization should begin from the first day of employment.

Whether the employer decides to terminate the relationship orrenew a Filipino domestic worker’s contract, it is important to follow the applicable procedures and maintain clear employment records.

Recommended practices include:

• Keeping a clear copy of the employment contract.

• Recording the worker’s employment start date.

• Maintaining records of salary payments.

• Documenting the worker’s salary and any changes to it.

• Reviewing the total period of service before the contract ends.

• Understanding the financial rights of both parties.

• Settling all amounts due within the required deadlines.

• Referring to official sources when a particular case is unclear.

These steps not only make the calculation more accurate but can also help reduce the risk of disputes when the employment relationship ends.

Frequently Asked Questions

How Do I Calculate the End of Service Benefit for a Domestic Worker in Saudi Arabia?

The benefit is calculated based on the number of completed consecutive four-year periods, using the worker’s final wage as the basis for the calculation.

Is the Domestic Worker’s End of Service Benefit the Same as That of a Company Employee?

No. Domestic workers are governed by specific regulations, while employees covered by the general Saudi Labor Law may be subject to different rules for calculating end of service benefits.

Is a Domestic Worker Entitled to a Benefit If She Has Worked for Less Than Four Years?

The relevant provision calculates the benefit as one month’s wage for every four consecutive years of service. Therefore, a proportional benefit for a period of less than four years should not be assumed unless there is a legal or contractual basis for it.

Which Salary Is Used to Calculate the Benefit?

The worker’s final wage is the basis specified in Article 22 for calculating the end of service benefit for domestic workers.

Can an Employer Deduct a Debt From the Worker’s Final Entitlements?

Article 23 allows an employer to deduct a debt owed by the domestic worker to the employer as a result of the employment relationship from the amounts payable to the worker, subject to the applicable regulations.

Know Your Rights Before a Domestic Worker’s Contract Ends

Understanding the rules governing end of service benefits for domestic workers in Saudi Arabia makes the process much easier. The key is to use the correct regulatory basis and avoid confusing domestic worker entitlements with the rules that apply to other categories of employees.

Choosing an experiencedrecruitment office in Tabuk that understands domestic worker procedures can also make the transition from ending an existing contract to starting a new recruitment process more organized and straightforward.

If you are considering submitting a newrecruitment request for a domestic worker after the current contract ends, it is important to understand the procedures and work with a specialized recruitment provider that can guide you through the process clearly.