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Thursday, December 2, 2010

How to Compute End of Service Benefits for working in K.S.A.



When does an overseas Filipino worker (OFW) who works in the Kingdom of Saudi Arabia (KSA) qualifies to receive a retirement pay from his employer? Are you sure you have received the right amount? Do you know how it was computed?

Here is a discussion of our great OFWs in OFWGuide Forum. May this topic be of help to OFWs wondering how they can get their retirement pay.

A forumer named charisma asked how an OFW who worked for some 30 years in Saudi would compute his retirement pay.

Forumer dark_hollywood answered add your one month salary to benefits and vacation pay equals end of service benefits (1 mo. salary + benefits + vacation pay = SR 0000.00).

Here’s how you can get your:

a. End of Service Benefits: One month salary divided by thirty days multiply by 1.25 (30 days/24 months = 1.25) multiply by 24 months (SR0000/30 X 1.25 X 24 = SR 0000.00)

b. Vacation pay: Basic salary divided by thirty days multiply by 1.75 (21 days / 12 months = 1.75) multiply by 24 months. (SR0000/30 X 1.75 X 24 = SR 0000.00)

According to dark_hollywood, the computation above is for two (2) years of service only which is equivalent to 24 months. In vacation pay, the new Saudi Labor Law stated that a worker is entitled of 21 days paid vacation annually. Aside from the amount to be paid by the employer, the employer shall bear the final exit visa and the fees and free Air ticket back to origin of the worker.

There are certain exceptions, though. If an expatriate has resigned within the first two years of service, he is not entitled to any ESB. If he has resigned between two to five years of continuous service, he is entitled to one third of the salary. If he has resigned between five years up to ten years of continuous service, he is entitled to two thirds of the salary and to a full salary, beyond 10 years of continuous service. Again, the definition of "salary" here includes basic pay plus all the allowances, excluding of course, certain exceptions such as sales commissions, etc.,

23 comments:

  1. Who are the rightful beneficiaries of the end of benefits of a deceased OFW(KSA) who has 3 subsisting marriages.

    How it is dealt with if the deceased OFW designated the 3rd wife and their children as the sole beneficiaries of the end of service benefits?

    How about the first wife who is my mother and us , the children of the first family, are we entitled for the benefits too?

    please reply.
    thank you

    ReplyDelete
  2. Who are the rightful beneficiaries of the end of benefits of a deceased OFW(KSA) who has 3 subsisting marriages?

    How it is dealt with if the deceased OFW designated the 3rd wife and their children as the sole beneficiaries of the end of service benefits?

    How about the first wife who is my mother and us , the children of the first family, are we entitled for the benefits too?

    please reply.
    thank you

    ReplyDelete
  3. Hi Sir, I'm not sure but as far as I know whoever is/are written as beneficiary/ries on the contract would be the honored beneficiary/ries by the employer to receive the benefits..

    ReplyDelete
  4. Sir, I got an email from Philippine embassy in KSA. It says that 50% goes to the first family, 25% to the children of the 2nd wife and 25% to the children of the 3rd wife.Since the 2nd and 3rd marriages are null and void. The 2nd and 3rd wife are not entitled to claim it.

    We still dont knoe yet about the real settlement since the check (drawn payable to the Philippine ambassador in behalf of the beneficiaries of Mr. XXX, ) is still in the Saudi Foreign Affairs.

    if what you said is true that those who are written as beneficiaries on the contract would be receive the benefits, does it mean we the first family are not entitled by it?

    pls help.

    ReplyDelete
  5. Actually Sir, I'm not really 100% sure about how they gonna honor the degree of relation to your father..But as you mentioned the benefits will be released through the Philippine Ambassador so I think the Philippine Embassy would be deciding authority.On which case, they can favor you as the original/first family because the governing law in this case would now be Philippine Law.I advice you to coordinate with Philippine Embassy on this matter to have a clear and complete information.. By the way, thank you for visiting my blog..

    ReplyDelete
  6. Another thing, the validity of marriage would still apply on this.You mentioned that the 2nd and 3rd marriage are null and void,so this case will probably favor on your side...

    ReplyDelete
  7. Thank you very much , Sir.
    Your blog really helps alot of OFW's concerns.
    More power!!!

    ReplyDelete
  8. Philippine embassy in KSA always answers my emails.

    But DFA-OUMWA in the Philippines NEVER answer back nor answer telephone calls.

    Until now, we are not yet enlightened.

    Anyway thank you for this blog. This gives me hope for my concerns. Thank you.

    ReplyDelete
  9. hi,ur blog is very helpfull..I am going home soon as finished contract of 2 yrs and with additional 7 months.Im working in private establishment,my employer only give the vacation pay when the worker return from vacation.How can I claim it to him my vacation pay an ESB coz i don't have plan to return?pls give me advise...

    ReplyDelete
  10. If you're planning to have final exit better file a resignation. Because for sure they will not give you your vacation pay unless you return.This is one strategy by some employers. Good thing if your vacation pay is given during paydate and your payroll is given thru your bank account by then you have a way to claim it.Which is not a proper way because without proper exit and release you will be blacklisted in the Kingdom...In your case you should make a formal resignation for you to claim the GOSI and all amounts remaining from your vacation.

    ReplyDelete
  11. b. Vacation pay: Basic salary divided by thirty days multiply by 1.75 (21 days / 12 months = 1.75) multiply by 24 months. (SR0000/30 X 1.75 X 24 = SR 0000.00)

    this computation is for 1 year contract only?

    what if i did not take that vacation?then i decided not to renew my contract on the next year?would you think that company will still give that vacation pay as an additional for the end of service benefits?
    please give me an answer?because this is my first here in KINGDOM!!
    thank you so much!!REALLY APRICIEATE FOR YOUR UPCOMING COMMENT

    MYKE OF KSA

    ReplyDelete
  12. If it's been clear to both parties (you and employer) that you will not renew your contract, then they should monetize the remaining leave credits you have and be included in your last pay...However the total leaves which are eligible for monetization will still depend on the internal policy (Like for example in my own company, only maximum of 5 days leave credit can be forwarded to the next calendar year. Any excess will be forfeited)..

    ReplyDelete
  13. Hi Mr. Angelo, I just want to know how much exactly will i get for my Vacation pay according to the computation above.

    Im working in Saudi Arabia for almost 4 years and I got my first Vacation on my first 2 years. Now I have a Basic Salary of 2,000 Riyals + 200 Riyals Food Allowance. Im planning to go for vacation on April 2013. How can I compute my Vacation pay or is there any other benifits I can get out of these? Thank you and I will really appreciate to hear from you soon.

    -AB

    ReplyDelete
  14. @Anonymous..

    In most cases po ang vacation pay is parang regular salary lang din po as long as your vacation days are covered within your vacation leave credits..Sa madaling sabi eh dapat regular ka parin tatanggap ng sweldo kahit na nakabakasyon ka. Pero check mo po sa contract mo kung ganyang din ang nakalagay na benefit.

    ReplyDelete
  15. Dear Expat Guru,
    Sir, i just want to know of how my ESB will be computed, I'm working in Saudi Arabia Since Feb.21,2009. I'm now in my 4 years. My First contract ends for 2 years, eventually i renew my contract for another 2 years. Prior to my contract end, i inform my employer that i will not renew my contract because of health reason.
    Now, they computed me for only 5 days credit considering that i did not resign,m,my letter is for end of contract.
    Sir, i want to know how my ESB computed?
    Please Help

    borj

    ReplyDelete
  16. Mr. Angelo,

    am working at kil jin kang conts. co. here in saudi arabia since nov.30, 2008 and i resigned to my company may 03, 2013, now am asking how to compute my esb? the article 85 states that 1/3 for your salary. i want to ask my company computed my esb if right..my basic salary 3,438 + 200 allowance + 250 site allowance..what may company compute may esb is - 3877/2/ 1/3 x 4years 5months of service. so pls help for this..

    thanks,

    arf

    ReplyDelete
  17. Gud am...sir i want to know if how is my esb computed..i started with my current cmpany last nov. 2008 and i want to resign this coming october 2013..your immediate response regarding this matter is highly appreciated..thanks.

    ReplyDelete
  18. ito po nakalagay sa Chapter 4 Article 85 ng Saudi Labor law: "Article (85):
    If the work relation ends due to the worker’s resignation, he shall, in this
    case, be entitled to one third of the award after a service of not less than two
    consecutive years and not more than five years, to two thirds if his service is
    in excess of five successive years but less than ten years and to the full
    award if his service amounts to ten or more years."

    ReplyDelete
    Replies
    1. Paano nman po ung sick leave namin na hindi po nagamit. Tulad na lamang po sa sitwasyon ko, na from 2008 til present hindi ko pa nagamit. Mababayaran kaya kmi ng company? And, how many days I am entitled for every year?

      Delete
  19. How many days are we entitled for sick leave in one year and succeeding? In case that we resigned, can we still claim our sick leave pay?

    ReplyDelete
  20. This comment has been removed by the author.

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  21. Very informative. However, there is a link from where you can calculate your end of Service Benefits through illustrations. Check it out

    http://life-in-saudiarabia.blogspot.com/2014/03/end-of-service-benefits-esb-calculation.html

    ReplyDelete
  22. hi where and how can i claim gosi benifits of my father he worked 18 years in KSA he resigned from an electric company year 1996 and he passed away dec. of 2007. can we still claim his gosi benifits?

    ReplyDelete