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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. 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 May 2026. Actual liability varies with contract terms, company policy, and judicial interpretation.
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. Termination pays the full entitlement from day one. An employee who resigns before one year accrues nothing; one to three years pays one-third; three to five years pays two-thirds; five years or more pays in full. Gross misconduct under Article 44 can forfeit the entitlement.
Saudi Arabia
Saudi Labor Law (Royal Decree M/51, as amended) provides 15 days of basic salary per year for the first five years and a full month per year thereafter, with no statutory cap. 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 in July 2026 as a savings system takes over, so provisioning assumptions for Oman should be reviewed against that transition.
Resignation versus termination
In every GCC country, an employer termination pays the full statutory entitlement from the first day of service. A resignation can pay less, or nothing, where the employee has not crossed the minimum tenure threshold. The exposure swing between the two can be substantial: a UAE employee who resigns at four years is owed two-thirds of the award, but the full amount if terminated. 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, not the total package, in all six markets. Housing, transport, bonuses, and allowances are excluded, so provisioning on gross pay overstates the obligation. Because the award re-bases on the latest basic salary, 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.
Common questions
- How do I calculate my company's end-of-service liability in the UAE?
- 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. Termination pays the full amount; resignation can reduce it below set service thresholds.
- Why does end-of-service gratuity sit on our balance sheet?
- 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.
- Is the liability calculated on basic salary or total package?
- Basic salary only. Housing, transport, bonuses, commissions, and allowances are excluded across all six GCC countries. Because basic pay is often 50 to 70 percent of total compensation, provisioning on the gross package materially overstates the liability.
- How much do we owe if an employee resigns versus is terminated?
- Termination by the employer pays the full statutory entitlement from day one of service. Resignation can reduce the amount below set tenure thresholds, and forfeits it entirely below the minimum service period. The calculator shows both routes so you can see the exposure swing for the same tenure.
- Does the liability differ by GCC country?
- 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.
- How should we provision for gratuity across a multi-country workforce?
- 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.
- Are free-zone employees included in the liability?
- 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.
- Is end-of-service gratuity taxable?
- 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.
Tenure Comp Intelligence
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.