1. What is End of Service Reward (ESB)?

End of Service Reward (ESB) is a financial benefit paid to employees upon termination of their employment contract. It's calculated based on the employee's salary and years of service, with different rates for the first 5 years and subsequent years.

2. How Does the Calculator Work?

The calculator uses the ESB formula:

Where:

• \( Salary \) — Monthly salary in Saudi Riyals (SAR)
• \( Service Years \) — Total years of service (can include fractions of years)

Explanation: For the first 5 years of service, the employee earns half a month's salary for each year. For service beyond 5 years, the employee earns a full month's salary for each additional year.

3. Importance of ESB Calculation

Details: Accurate ESB calculation is crucial for both employers and employees to ensure proper financial settlements at the end of employment. It helps in budgeting and financial planning for both parties.

4. Using the Calculator

Tips: Enter monthly salary in SAR and total years of service (can include decimal values for partial years). All values must be valid (salary > 0, service years > 0).

5. Frequently Asked Questions (FAQ)

Q1: Are there any maximum limits for ESB?
A: This depends on local labor laws. Some jurisdictions may cap the total ESB amount or the number of years considered.

Q2: How are partial years calculated?
A: Partial years are typically calculated proportionally. For example, 6 months service would count as 0.5 years.

Q3: Is ESB taxable?
A: Tax treatment of ESB varies by country. Consult local tax regulations for specific guidance.

Q4: Does this calculation apply to all employment contracts?
A: Some contracts may have different terms. Always check the specific employment agreement and local labor laws.

Q5: What if the employee resigns versus being terminated?
A: Some jurisdictions differentiate between voluntary resignation and termination. The calculator assumes full entitlement - check local regulations for exact rules.