One idea, three laws
End-of-service gratuity is a lump sum an employer pays when a job ends, worked out from how long you served and what you were paid. Qatar, the UAE and Saudi Arabia all have it, all base it on years of service, and all leave the details different enough that a figure a colleague quotes from another country is probably wrong for yours.
The three laws, as the calculators on this site apply them:
| Qatar | UAE | Saudi Arabia | |
|---|---|---|---|
| Law | Labour Law No. 14 of 2004, Article 54 | Federal Decree-Law No. 33 of 2021, Article 51 | Labor Law, Articles 84, 85 and 87 |
| Per year of service | At least 3 weeks (21 days) of basic wage | 21 days of basic wage for each of the first 5 years, 30 days a year after that | Half a month’s wage for each of the first 5 years, a full month a year after that |
| Wage used | Last basic wage | Last basic wage | Last wage |
| Minimum service | 1 year | 1 year | None for termination; 2 years for resignation |
| Part years | Pro rata | Pro rata | Pro rata |
| If you resign | Same as termination | Same as termination | Reduced: nothing under 2 years, a third from 2 to 5 years, two thirds from 5 to 10, all from 10 |
| Cap | None in the law | Two years’ wage | None |
Everything below follows from this table. The figures are the legal minimum: a contract or company policy can give more, never less.
Qatar: three weeks a year, on the basic wage
Qatar’s rule is the simplest. For every year of service you receive at least three weeks of your last basic wage, and part years count proportionally. The law counts a month as 30 days, so three weeks is 21/30 of a month’s basic pay.
Say your basic salary is QAR 6,000 and you worked 4 years and 6 months. The daily wage is 6,000 / 30 = QAR 200. Each year earns 21 days, so 4.5 years earn 94.5 days, which is 94.5 × 200 = QAR 18,900.
Two things matter in practice. First, it is the basic wage, not the total package: housing, transport and other allowances are left out unless your contract says otherwise, and many contracts in Qatar set the basic at half or less of the total. Second, you need one completed year before any gratuity is due; someone leaving after eleven months receives nothing under the law.
The employer may deduct amounts you owe the company from the gratuity, and under Article 61 can withhold it for the serious misconduct cases that article lists.
The UAE: two tiers and a cap
The UAE’s 2021 law uses two rates. The first five years earn 21 days of basic wage per year; every year after the fifth earns 30 days. The total cannot exceed two years’ wage.
With a basic salary of AED 8,000 and 7 years of service: the daily wage is 8,000 / 30 = AED 266.67. The first five years earn 5 × 21 = 105 days, the next two earn 2 × 30 = 60 days, 165 days in all, which is 165 × 266.67 = AED 44,000.
Under the old law a worker who resigned before five years lost part of the gratuity. The 2021 law removed that: resignation and termination now pay the same, after the one-year minimum. Days of unpaid leave are not counted as service, so a long unpaid absence shortens the period the gratuity is calculated on.
The calculator offers two ways to turn a monthly wage into a daily one: dividing by 30, which is the usual reading, and dividing the yearly wage by 365, which some employers use and which gives a slightly lower figure. The choice is worth checking against your own final settlement.
Try it: UAE Gratuity Calculator
Enter your basic salary and your start and end dates. The two tiers, the cap and any unpaid leave are applied, and the working is shown line by line.
Saudi Arabia: more generous, unless you resign
Saudi Arabia’s award is the largest of the three: half a month’s wage per year for the first five years, a full month per year after that, with no cap. It is also the only one of the three where how the job ends changes the amount.
If the employer ends the contract, you receive the full award, with no minimum service. If you resign, Article 85 applies a scale by completed years: under two years, nothing; from two to five years, a third of the award; from five to ten, two thirds; from ten years, the full award. The scale works on completed service, so resigning a month before your fifth anniversary costs you the step from a third to two thirds.
Two examples with a wage of SAR 10,000. After 8 years, terminated: five years at half a month is 2.5 months, three more at a full month is 3 months, 5.5 months in all, SAR 55,000. The same 8 years ending in resignation: two thirds of that, SAR 36,667. The calculator shows both so you can see what the reason for leaving is worth.
Article 87 keeps the full award for some resignations: when the worker leaves for a reason beyond their control, and when a woman ends her contract within six months of her marriage contract or within three months of giving birth. The calculator has a separate option for these.
The Saudi law speaks of the “wage” rather than the “basic wage”. In practice the award is calculated on the last wage including the allowances that are paid regularly as part of it, which is one reason Saudi settlements differ from Gulf neighbours even for the same salary. If your payslip separates a basic from allowances, ask HR which figure they will use before you resign, not after.
Four things that reduce the figure
Across all three countries, the gratuity on your final settlement is often lower than the first calculation because of the same handful of items.
Unpaid leave. The UAE excludes unpaid absence from service by law, and employers in Qatar and Saudi Arabia commonly do the same. Three months of unpaid leave over a five-year contract takes about 5 percent off.
Basic versus total salary. In Qatar and the UAE the law uses the basic wage. A package of AED 12,000 with a basic of AED 5,000 earns gratuity on the 5,000. This is the single largest source of disappointment at the end of a contract, and the contract you signed on day one decided it.
Money you owe. Loans, advances and the cost of unreturned company property can be deducted from the gratuity in all three countries.
Timing of a resignation in Saudi Arabia. The one-third and two-thirds steps are on completed years, and the difference between 4 years 11 months and 5 years is a third of the whole award.
Checking your own figure
Before you accept a final settlement, work the figure out yourself with your start date, your last working day, your basic wage and any unpaid leave, and compare it line by line with what HR offers. The three calculators on this site show the daily wage they used, the days earned in each tier and the share applied, so a difference is easy to find and to query.
The ministries publish their own calculators too: Qatar’s Ministry of Labour has one on its website, and the UAE’s Ministry of Human Resources and Emiratisation does as well. If your figure matches theirs and HR’s does not, you have something concrete to raise, with the labour department as the next step.
These figures are a guide to the legal minimum, not legal advice. Contracts, collective agreements and company savings schemes can change what you are owed, and a lawyer or the labour ministry can confirm your case.
Frequently asked questions
Is gratuity calculated on basic salary or total salary?
In Qatar and the UAE on the last basic wage, by law, so allowances for housing and transport are left out. In Saudi Arabia the law says “wage”, and the award is usually worked out on the last wage including regular allowances. Your contract can be more generous than the law, never less.
Do I get gratuity if I resign?
In Qatar and the UAE, yes, the same as if you were dismissed, once you have completed one year. In Saudi Arabia resignation reduces it: nothing under two years of service, a third from two to five years, two thirds from five to ten, and the full award from ten years.
How much gratuity for 5 years in the UAE?
Five years at 21 days of basic wage each is 105 days. With a basic salary of AED 8,000 the daily wage is 8,000 ÷ 30 = 266.67, so the gratuity is 105 × 266.67 = AED 28,000. Years after the fifth earn 30 days each, and the total is capped at two years’ wage.
Does unpaid leave reduce gratuity?
In the UAE the law excludes days of unpaid absence from the service period, and employers in Qatar and Saudi Arabia commonly do the same. The calculators let you enter unpaid days so the figure matches a final settlement.
Can my employer deduct money from my gratuity?
Yes, amounts you owe the company, such as loans, advances and the cost of unreturned property, can be deducted in all three countries. Qatar’s law also allows the gratuity to be withheld for the serious misconduct cases listed in Article 61.
Written by Saad Naeem
AI engineer in Doha who builds every tool on ToolboxHere. The figures in the guides come from the official sources named in them or from the tools themselves. Found a mistake? Tell us and it is corrected.