GCC End of Service Gratuity: Complete Guide for UAE, Saudi Arabia, Bahrain, Qatar, Kuwait & Oman (2026)

End of service gratuity is one of the most valuable financial benefits for expatriate workers in the Gulf. After years of service, it can amount to several months of salary — or, for long-tenured employees, significantly more. Yet the rules differ substantially between the six GCC countries, and mistakes in calculating the daily rate, resignation multiplier, or Oman's transitional split are surprisingly common.

This guide covers the correct formula for all six GCC nations, key mistakes to avoid, and a comparison table so you can benchmark your entitlement at a glance.

How GCC Gratuity Is Calculated

The fundamental formula is the same across GCC countries:

Gratuity = (Monthly Salary ÷ Days Divisor) × Eligible Days × Multiplier

Where "Days Divisor" is 30 for all countries except Kuwait (which uses 26), "Eligible Days" depends on years of service and country-specific tiers, and "Multiplier" is applied for certain resignation scenarios.

UAE — Federal Decree-Law 33/2021

The updated UAE Labour Law, effective February 2022, simplified gratuity and removed the previous resignation penalty. Key rules:

• First 5 years: 21 working days per year
• After 5 years: 30 calendar days per year
• Cap: 2 years of total basic salary (24 months)
• Resignation: same as termination — no reduction
• Salary base: basic salary only (not allowances)

Example: an employee earning AED 15,000/month who has served 7 years receives: (15,000 ÷ 30) × [(5 × 21) + (2 × 30)] = AED 500 × 165 = AED 82,500.

Saudi Arabia — Articles 84 & 85

Saudi Arabia uses the "actual wage" (basic salary plus all fixed regular allowances — housing, transport, communication) as the salary base. This is a key distinction from other GCC countries.

• First 5 years: 15 days (½ month) per year
• After 5 years: 30 days (1 month) per year
• Resignation tiers (Art. 85): <2 yrs = 0%; 2–5 yrs = 33%; 5–10 yrs = 67%; 10+ yrs = 100%

Example: an employee earning SAR 12,000/month (including SAR 3,000 housing allowance) with 8 years who resigned: actual wage = SAR 12,000; days = (5 × 15) + (3 × 30) = 165; multiplier = 2/3. Gratuity = (12,000 ÷ 30) × 165 × 0.667 = SAR 44,000.

Bahrain — Law No. 36/2012 and SIO Reform

Bahrain's Labour Law uses a 2-tier formula with no resignation penalty — both resignation and termination receive the same amount:

• Years 1–3: 15 days (½ month) per year
• Year 4 onward: 30 days (1 month) per year
• No cap
• From March 2024: new non-Bahraini employees accrue through SIO monthly contributions rather than a lump-sum payment on termination

Qatar — Law No. 14/2004, Article 54

Qatar offers the simplest formula in the GCC: a flat 21 working days (3 weeks) per year of service, with no upper cap and no resignation reduction. Minimum 1 year of service required.

• All years: 21 days per year
• No cap, no resignation penalty
• Salary base: basic salary only

Kuwait — Labour Law No. 6/2010

Kuwait has two important differences from the rest of the GCC:

• Daily rate = salary ÷ 26 (not ÷ 30) — because Kuwait bases the daily rate on 26 working days per month, per Article 55
• Cap: 1.5 years of total salary (18 months × 26 days)
• First 5 years: 15 days per year
• After 5 years: 30 days per year
• Resignation tiers: <3 yrs = 0%; 3–5 yrs = 50%; 5–10 yrs = 67%; 10+ yrs = 100%

Using ÷30 instead of ÷26 would under-pay Kuwaiti employees by ~13%. This is the single most common calculation error for Kuwait gratuity.

Oman — Before and After Royal Decree 53/2023

Oman enacted Royal Decree 53/2023, effective July 31, 2023, which replaced the tiered formula with a flat rate:

• From July 31, 2023: flat 30 days (1 month) per year, all years
• Before July 31, 2023: 15 days/yr (years 1–3), 30 days/yr (year 4+)
• Split calculation: employees whose employment spans both sides of July 31, 2023 have their gratuity calculated separately under each law

Example: employee who joined January 2020 and leaves January 2026 — 3.58 years under old law (Jan 2020 – Jul 2023) and 2.5 years under new law (Jul 2023 – Jan 2026). Old law: (3 × 15) + (0.58 × 30) = 62.4 days. New law: 2.5 × 30 = 75 days. Total: 137.4 days.

GCC Gratuity Quick-Reference Table

Common Mistakes to Avoid

• Using ÷30 for Kuwait: Kuwait law specifies ÷26 working days. Always use the correct divisor.
• Forgetting Saudi allowances: Saudi uses the "actual wage" — basic salary plus housing, transport, and other fixed allowances.
• Ignoring resignation tiers: Saudi and Kuwait significantly reduce benefits for resignation at certain service lengths.
• Missing Oman's transition: Employees with service crossing July 31, 2023 must apply both formulas and add the results.
• Applying UAE's old law: The pre-2022 resignation penalties no longer apply. Resigned and terminated employees get the same benefit.

When Is Gratuity Paid?

In all GCC countries, gratuity is due at the time of employment termination — whether by resignation, dismissal, or contract expiry. Most labour laws require payment within 7–14 days of the last working day, though enforcement timelines vary. If an employer delays or withholds gratuity without cause, employees can file a complaint with the relevant Labour Ministry.

Calculate Your GCC Gratuity

Use the free Multi-Toolkit End of Service Calculator to get an instant, accurate gratuity figure for any GCC country. It applies the correct daily rate divisor for each country, handles resignation multipliers, performs the Oman RD 53/2023 split calculation, and generates a shareable URL so you can bookmark or share your result.