What do you owe your workforce in end-of-service?
End-of-service gratuity is a statutory liability that builds with every month of tenure. Enter a role’s country, basic salary, and service period to size the liability you carry for it, and see how a resignation and an employer termination differ. Free, no signup. Covers all six GCC markets. Five-second answer.
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Estimates the statutory end-of-service liability for private-sector mainland roles in UAE (Federal Decree-Law No. 33 of 2021), Saudi Arabia (Royal Decree M/51), Qatar (Law No. 14 of 2004, amended by Law No. 17 of 2020), Bahrain (Law No. 36 of 2012), Kuwait (Law No. 6 of 2010), and Oman (Royal Decree 53/2023). Current as of June 2026. Actual liability varies with contract terms, company policy, and judicial interpretation.
Salary base differs by market: most GCC regimes accrue on basic salary, but Saudi Arabia accrues on the last actual wage (basic plus continuous/fixed allowances such as housing and transport) under Labor Law Art. 84, so for a Saudi role enter the full actual wage, not basic only. DIFC roles accrue under the DEWS savings scheme (not traditional gratuity). ADGM roles may sit on an optional pension scheme. QFC employment does not mandate gratuity. Most other GCC free zones follow national labour law. Oman applies a split-period calculation under Royal Decree 53/2023 (pre- and post-26 July 2023 tenure handled separately). Government employees, domestic workers, and limited or part-time contracts are excluded. Termination for gross misconduct may forfeit entitlement.
Not legal advice. Consult a qualified labour lawyer for specific cases.
Enter the role’s basic salary and service period to see the end-of-service liability you carry for it.
How end-of-service liability works across the GCC
Every private-sector employer in the GCC carries an end-of-service gratuity obligation. It is statutory, it accrues with tenure, and it is calculated from each employee’s basic monthly salary and total years of service. Unlike a pension scheme, it is a one-off settlement the employer owes when employment ends, which is why finance and total-rewards teams provision for it as a growing liability rather than a cost booked at exit.
The size of the liability turns on three things: which country the role sits in, how long the employee has been with you, and whether they resign or you terminate the contract. Each market sets its own accrual rate, cap, and resignation thresholds, so a workforce spread across the GCC carries a different obligation in each jurisdiction.
United Arab Emirates
Under Federal Decree-Law No. 33 of 2021, gratuity accrues on basic salary at 21 days per year for the first five years and 30 days per year thereafter, capped at two years’ salary. Nothing is payable below one completed year of service, whether the employee resigns or is terminated; from one year onward both routes pay in full, at the same figure. Article 51 of the 2021 law abolished the earlier graduated resignation reductions (one-third at one to three years, two-thirds at three to five), so resignation and termination settle identically once the one-year minimum is met. Gross misconduct under Article 44 can forfeit the entitlement.
Saudi Arabia
Saudi Labor Law (Royal Decree M/51, as amended) provides 15 days per year for the first five years and a full month per year thereafter, with no statutory cap. Crucially, end-of-service is computed on the last actual wage, basic plus continuous and fixed allowances such as housing and transport (Article 84), not basic only, so where Saudi allowances rival basic the liability runs materially higher than a basic-only estimate. The resignation thresholds are the longest in the region: resignation before two years forfeits the award, two to five years pays one-third, five to ten years pays two-thirds, and ten years or more pays in full. An uncapped accrual means long-tenured senior roles carry a materially larger liability than in the UAE.
Qatar
Qatar’s framework (Law No. 14 of 2004, amended by Law No. 17 of 2020) is flat: three weeks (21 days) of basic salary per year for all years of service, with no cap and no tiering. Any employee with at least one completed year is owed the full per-year entitlement on exit, so the resignation-versus-termination gap is narrow once the minimum service period is cleared.
Bahrain and Kuwait
Bahrain (Law No. 36 of 2012) runs a two-tier structure: 15 days per year for the first three years, then 30 days per year. Kuwait (Law No. 6 of 2010) mirrors the 15-then-30 pattern but caps the award at 1.5 years’ salary and applies its own resignation thresholds, including a half entitlement between three and five years that is unique in the region. Both reduce the liability for shorter-tenured resignations.
Oman
Oman moved to a flat 30 days per year under Royal Decree 53/2023 (the Social Protection Law), with no reduction for voluntary resignation once the 12-month minimum is met. Tenure that straddles the 26 July 2023 boundary is calculated across two periods: the old tiered Labour Law rates before the cutoff and the flat rate after. Article 136 phases gratuity out for expatriate staff from 19 July 2027 (postponed from 2026) as a savings system takes over, so provisioning assumptions for Oman should be reviewed against that transition.
Resignation versus termination
An employer termination pays the full statutory entitlement once any minimum service period is met. In the UAE and Qatar that floor is a one-year cliff that applies to both routes: below one completed year nothing is payable, whether the employee resigns or is terminated, and from one year onward both pay the full amount (the UAE’s pre-2021 graduated resignation reductions were abolished). In markets with no minimum, such as Saudi Arabia, a termination accrues from the first day, while a tenure-graduated resignation scale still reduces the resignation payout across years of service. Sizing both routes is the difference between a provision that holds and one that surprises you at exit.
Provisioning across a multi-country workforce
The liability is calculated on basic salary in five of the six markets; Saudi Arabia is the exception, computing it on the last actual wage (basic plus continuous and fixed allowances such as housing and transport) under Article 84. Bonuses and one-off pay are excluded everywhere, so a gross-package provision overstates the obligation, while a Saudi provision built on basic alone understates it. Because the award re-bases on the latest pay, the liability should be recalculated after every pay review and accrued monthly so it tracks tenure as it grows. Free-zone entities can sit outside national gratuity rules, so the applicable regime should be confirmed per entity before the numbers are booked.
Deciding whether to run your own entity at all? The EOR vs. entity calculator models the overhead of each route for the UAE and Saudi Arabia, with the break-even point where your own entity becomes the cheaper option.
Common questions
Under UAE Federal Decree-Law No. 33 of 2021, gratuity accrues on basic salary at 21 days per year for the first five years and 30 days per year after, capped at two years' salary. For each employee, multiply the accrued days by the daily basic wage (monthly basic divided by 30), then sum across the workforce. Below one completed year of service nothing is payable, whether the exit is a termination or a resignation; from one year onward termination and resignation pay the same full amount. Article 51 of the 2021 law abolished the old graduated resignation reductions.
Gratuity is a statutory lump sum every private-sector employee earns as they accrue service. It is a real, growing obligation, so finance teams provision for it as an accrued liability that builds month by month, rather than booking it as a one-off cost at exit.
It depends on the market. In five of the six GCC countries (UAE, Qatar, Bahrain, Kuwait, Oman) the award is computed on basic salary, so housing, transport, bonuses, and commissions are excluded and provisioning on the gross package overstates the liability. Saudi Arabia is the exception: under Labor Law Article 84 end-of-service is computed on the last actual wage, basic plus continuous and fixed allowances such as housing and transport, so for a Saudi role enter the full actual wage rather than basic only, otherwise the liability is understated. Bonuses and one-off pay are still excluded everywhere.
It turns on the market and the length of service. Where a country sets a minimum service period, no end-of-service gratuity accrues below it for either route: the UAE and Qatar require one completed year, so a sub-one-year exit pays nothing whether the employee resigns or is terminated. Above the minimum, and from day one in markets with no minimum such as Saudi Arabia, an employer termination pays the full statutory entitlement. A resignation can still pay less: the UAE pays it in full from one year (Federal Decree-Law No. 33 of 2021 abolished the old graduated reductions), while Saudi Arabia and some other markets scale the resignation payout by tenure. The calculator shows both routes so you can see the exposure swing for the same tenure.
Yes. Accrual rates, caps, and resignation thresholds vary by market: UAE pays 21 then 30 days, capped at two years' salary; Saudi Arabia pays 15 then 30 days with no cap; Qatar pays a flat 21 days; Bahrain pays 15 then 30 days; Kuwait pays 15 then 30 days capped at 1.5 years; Oman pays a flat 30 days per year under the 2023 Social Protection Law.
Calculate each role on its current basic salary and accrued service, then accrue monthly so the liability tracks tenure as it grows. Re-run after every salary review, since the obligation re-bases on the latest basic pay rather than the salary at hire.
It depends on the zone. DIFC roles accrue under the DEWS savings scheme instead of traditional gratuity, ADGM offers an optional pension scheme, and QFC employment does not mandate gratuity. Most other GCC free zones follow national labour law. Confirm each entity's regime before provisioning.
The GCC has no personal income tax, so the payment is tax-free to the employee regardless of amount or nationality. For the employer it is a labour cost; treat the accruing obligation as a liability under your local accounting standards.
Gratuity is the floor. Knowing what to pay is the rest.
End-of-service is one statutory line on the cost of a role. Tenure benchmarks what every role should actually pay across 12 sectors in UAE and Saudi, on verified primary sources refreshed quarterly.