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Confused About Your Pension? Try an End of Service Benefit Calculator

Laws & RegulationsConfused About Your Pension? Try an End of Service Benefit Calculator

Not everyone knows what they’re entitled to at the end of their service, which is why an end-of-service benefit calculator is essential. It’s critical to those retiring instead of an employee termination or resignation. 

Receiving a decent pension is vital for every employee. It provides a safety net for them when they reach their old age or are otherwise unable to work anymore. 

Fortunately, the pension system in Saudi Arabia does have an earnings-related old-age pension. Other arrangements exist for those not entitled to this benefit, such as an old-age settlement. 

The Need for an End-of-Service Benefit Calculator

The end-of-service point is when employers pay their employees a certain amount. 

There are quite a few factors involved here, so it’s essential to have an excellent end-of-service benefit calculator. 

This way, both parties will find it much easier to calculate the following: 

  • End-of-service benefits expense
  • The maturity date of the reward
  • Percentage of earnings that are being compensated

Before using a benefits calculator, they must know certain qualifying conditions. Let’s have a look at them now.

Qualifying Conditions for Old-Age Pension

This person’s age is at least 58 years for both men and women.

They need to have a minimum of 120 months of proven credited or paid contributions to the labor market. This is equal to 10 years following the Hijri calendar

Individuals with 25 years or 300 months of contributions are usually eligible to apply for retirement. 

Calculating old-age pension benefits

Old-age pension is calculated and based on 2.5 percent of the workers’s average monthly earnings in their final two years of earning. It could go all the way to 100 percent, depending upon what the authorities decide. 

For benefit calculation

The minimum monthly income is SAR 1500, with a maximum of SAR 45,000/month. 

The average monthly earnings for benefit calculation are not to exceed 150% of the person’s monthly earnings five years before. 

Special provisions

If the individual’s monthly earnings decrease in the final two years before retirement, they might get special provisions. 

These include the option to apply for adjusting the average earnings for benefit calculation. At a minimum, the pension will be SAR 1 984/month in such cases. 

Old-Age Settlement

If someone does not fulfill the above qualifications, they might be entitled to an old-age settlement. This refers to a lump sum equivalent to 10 percent of the individual’s average monthly earnings two years before retirement. 

This sum is paid every month of the first 5 years of contractions. There is also a 12 percent payment for each additional month after that.

Rules for Variant Careers 

For those considering late retirement, deferring the pension is not possible. Conversely, self-employed workers may be eligible for the same benefits as employees in a traditionally hired role. 

There is also no income tax payable by pensioners, and no social security contributions are expected.


Those nearing their retirement phase in KSA should search for a comprehensive and reliable end-of-service benefit calculator. 

It needs to be based on the current updates of Saudi Labor Law and is relatively easy to use. This way, they can get the maximum payments possible and lead a more comfortable retired life.