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End of service provision in Zakat

Is end of service provision added to the Zakat base?

The situation

Most provisions are treated as equity in the base, but end of service benefits and statutory vacation provisions are excluded from that treatment.

The law

  • Zakat Implementing Regulation, Ministerial Resolution 1007 (29 February 2024): Applies to financial years starting on or after 1 January 2024; 2.5 percent of the Zakat base

What it means for you

So end of service provision is not added like general provisions. Review each provision type. Provisions that are confirmed debts to non-shareholders are non-current liabilities.

What to do

  1. List provisions.
  2. Classify each.
  3. Prepare workings.

We can do this for youAnnual Zakat return and Zakat certificate for Saudi and GCC-owned companies: SAR 6,500

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