End-of-Service Reward: Your Full Rights in Egypt & Saudi Arabia
Comprehensive legal guide to calculating end-of-service reward in Egypt and Saudi Arabia with different scenarios and examples
More than 3.5 million Egyptians work in Saudi Arabia, with millions more in Egypt's private sector. Many don't realize their end-of-service reward can reach hundreds of thousands of pounds or riyals — and they may lose part of it simply due to not knowing the law. An employee who spent 15 years in Saudi Arabia earning 12,000 SAR is legally entitled to 135,000 SAR upon contract expiry.
Egyptian Labor Law
Under Law 12/2003: half month's salary per year for the first 5 years, then one full month per year thereafter. Based on the last basic salary. Minimum total = 24 months' salary. Applies regardless of termination reason.
Example: 12 years of service, 8,000 EGP monthly salary. First 5 years: 5 × 4,000 = 20,000 EGP. Remaining 7 years: 7 × 8,000 = 56,000 EGP. Total: 76,000 EGP.
Special Egyptian Cases
Resignation with proper notice: full reward. Unfair dismissal: full reward plus compensation of at least 2 months' salary per year of service. Death: payment goes to legal heirs.
Saudi Labor Law
Half month per year for the first 5 years, full month per year after that. Calculated on the last actual salary including base, housing allowance, transport allowance, and fixed allowances.
Example: 10 years, 15,000 SAR salary. First 5 years: 37,500 SAR. Next 5 years: 75,000 SAR. Total: 112,500 SAR.
Egypt vs. Saudi Arabia Comparison
| Item | Egypt (Law 12/2003) | Saudi Arabia (Labor Law) |
|---|---|---|
| Calculation basis | Last basic salary | Last full salary (base + allowances) |
| First 5 years | Half month / year | Half month / year |
| After 5 years | Full month / year | Full month / year |
| Minimum reward | 24 months | No minimum |
| Resignation < 2 years | Full reward paid | No reward |
| Resignation 2-5 years | Full reward paid | One-third of reward |
| Resignation 5-10 years | Full reward paid | Two-thirds of reward |
| Resignation 10+ years | Full reward paid | Full reward |
Saudi Resignation Rules
Before 2 years: no reward. 2-5 years: one-third of calculated reward. 5-10 years: two-thirds. Over 10 years: full reward. Example for 7-year resignation on 15,000 SAR: full calculation = 67,500 SAR, but receives two-thirds = 45,000 SAR.
Loss of Reward (Saudi)
Assaulting employer/colleagues, fundamental contract breaches, dishonesty, unauthorized absence (20 intermittent or 10 consecutive days), disclosing trade secrets.
Protect Your Rights
Keep employment contract copies, record your exact start date, retain monthly salary slips, read any resignation or clearance documents carefully before signing, and consult a labor lawyer if your rights are violated. In Saudi Arabia, ensure the calculation uses your full salary, not just the base.
How to Invest Your End-of-Service Reward
This may be the largest lump sum you ever receive. Don't rush to spend it. Park it in a savings account for at least one month before any decision. Pay off high-interest debts first. Ensure you have an adequate emergency fund. Then allocate the remainder across diversified investments based on your goals and age.
Frequently Asked Questions
Am I entitled to end-of-service reward if I resign in Egypt?+
Yes, Egyptian law guarantees the reward upon resignation provided you complete the notice period specified in your contract. Unlike Saudi Arabia, Egypt has no minimum service duration requirement for resignation cases.
Is the reward calculated on basic salary or total salary?+
It differs between the two countries. In Egypt, only the last basic salary is used. In Saudi Arabia, the last full salary including base, housing allowance, transport allowance, and other fixed allowances is used. The difference can be very significant.
What happens to my Saudi reward if I resign after 4 years?+
Resigning between 2-5 years entitles you to one-third of the calculated reward. If your full 4-year reward is 24,000 SAR, you'd receive only 8,000 SAR. However, if you are dismissed rather than resigning, you'd receive the full amount.
How do I verify my employer calculated my reward correctly?+
Calculate it yourself: Monthly salary × (5 × 0.5 for first years + additional years × 1). Then compare with what your employer paid. Use the end-of-service calculator on our site for an accurate result based on your exact situation.
Can an employer refuse to pay end-of-service reward?+
No, it's illegal except in specific cases defined by law, such as dismissal for gross misconduct. If an Egyptian employer refuses, file a complaint with the Labor Office. In Saudi Arabia, use the Musaned platform or the Ministry of Human Resources.