Business Glossary /
Payroll
A mandatory gratuity payment owed to employees upon termination of their employment in Saudi Arabia.
End-of-Service Benefit (EOSB) is a statutory payment required under Saudi Labor Law. Employees who have completed at least two years of service are entitled to EOSB calculated at half a month's wage per year for the first five years and one full month's wage per year thereafter. The calculation is based on the final basic salary. EOSB obligations represent a significant long-term financial liability for companies and must be accrued monthly. Failure to pay EOSB correctly is a leading cause of labor disputes in Saudi Arabia. Inclusive Solutions manages EOSB accrual, calculation and payment as part of its payroll services.
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