Dear all, I have a question regarding the end-of-service allowance. We are an international company based in Spain and have recently established a company in Saudi Arabia. We have relocated some of our Spanish employees to Saudi Arabia to continue their work, and we have agreed to maintain their salary as per the Spanish agreement.
The employee's salary, as per the contract (ignoring the variation formula), would be 20,750.00 SAR per month. However, the salary received last month after applying the contract formula was 17,500.00 SAR. When calculating the End of Service allowance, should we consider the last wage amount as 20,750.00 SAR (as per the contract) or 17,500.00 SAR (the amount actually received)?
Please note, in accordance with provision (84) of the Saudi labor law, "the ESA shall be calculated based on the last wage."
Thank you.
The employee's salary, as per the contract (ignoring the variation formula), would be 20,750.00 SAR per month. However, the salary received last month after applying the contract formula was 17,500.00 SAR. When calculating the End of Service allowance, should we consider the last wage amount as 20,750.00 SAR (as per the contract) or 17,500.00 SAR (the amount actually received)?
Please note, in accordance with provision (84) of the Saudi labor law, "the ESA shall be calculated based on the last wage."
Thank you.