End-of-service gratuity in the UAE and Saudi Arabia: how it is calculated

Not legal advice. This article summarises the end-of-service rules in the labour laws of the UAE and Saudi Arabia, and the official guidance about them, as checked in November 2026. It covers private-sector jobs. Your contract may give you more than the law's minimum, and your own case may have details this guide can't see. For a decision, ask MOHRE in the UAE, HRSD in Saudi Arabia, or a lawyer.

Short answer: in the UAE, a foreign full-time worker who completes at least one year of continuous service gets 21 days' basic wage for each of the first five years and 30 days' basic wage for each year after that, capped at two years' wage, paid within 14 days of the contract ending. In Saudi Arabia, the award is half a month's wage for each of the first five years and a month's wage for each year after that, based on your last wage. If you resign in Saudi Arabia, you get a third of the award after two to five years, two thirds after more than five and under ten, and all of it after ten years or more. The UAE law has no separate, lower scale for resignation.

This guide is for private-sector employees in the UAE and Saudi Arabia who want to check their own numbers, before they resign or when they weigh an offer. It doesn't cover government jobs or Egypt.

The rules side by side

UAE: 21 days, then 30 days, on your basic wage

Article 51 of the Labour Law says (Federal Decree-Law No. 33 of 2021, Article 51):

• A foreign full-time worker who has completed one or more years of continuous service is entitled to an end-of-service gratuity, calculated on the basic wage: 21 days' wage for each of the first five years, and 30 days' wage for each year after that.
• Once you have completed one year, you are also owed gratuity for parts of a year, in proportion to the time you worked.
• Days of absence without pay don't count toward your period of service.
• The gratuity is calculated on the last basic wage you were entitled to.
• The total may not exceed two years' wage.
• The employer may deduct amounts you owe under the law or a court judgment.
• A UAE national's end-of-service gratuity follows the legislation on pensions and social security, not this formula.

Article 53 then says the employer pays your wages and all your other entitlements within 14 days of the contract ending.

The government portal spells out what "basic" means: the gratuity "will not include allowances such as housing, transportation, utilities, furniture etc." It also says a worker who has served less than one year isn't entitled to gratuity (u.ae, End of service benefits, updated 15 October 2026). So the basic-salary line in your offer matters more than the total package for this calculation. Our guide to expected salary and notice period explains the basic-versus-package split.

Resigning. Article 51 sets the gratuity by length of service and basic wage. Unlike the Saudi law, it has no separate, lower scale for a worker who resigns. If you read about lower gratuity for resigning, check the date: the previous labour law, Federal Law No. 8 of 1980, was repealed when Decree-Law 33/2021 took effect on 2 February 2022 (Articles 73 and 74). One transition rule remains: for an open-ended contract made under the old law, the employer may calculate the gratuity under that law's provisions for open-ended contracts (Article 68). If you have worked for the same employer since before 2022, ask MOHRE how this applies to you. If you resign during probation, read our probation guide first: a gratuity needs a full year of service, and leaving during probation has its own notice rules.

Part-time and other work models. The portal says that, under Article 30 of Cabinet Resolution No. 1 of 2022, the gratuity for a part-time or other contract is the full-time gratuity multiplied by your contract's yearly working hours as a percentage of full-time hours. It adds that there is no gratuity for temporary work lasting less than a year.

The Savings Scheme. Since Cabinet Resolution No. 96 of 2023, an employer can choose to join a voluntary alternative, the Savings Scheme. For a full-time employee, the employer pays a monthly contribution into an approved investment fund: 5.83% of your monthly basic salary in your first five years of service, and 8.33% after that. You are owed the contributions and any returns within 14 days of the employment ending. The employer must still calculate and settle the gratuity you earned before you were enrolled (u.ae). If your offer mentions the scheme, ask which fund and from what date.

Free zones. The portal says "those working in free zones are generally not governed by the UAE Labour Law", and each free zone authority has its own employment law (u.ae, Working in free zones). If your employer is in a free zone, ask which end-of-service rules apply to you.

A worked example (UAE, illustrative figures)

The law counts the gratuity in days of basic wage. Suppose, for illustration only, that your daily basic wage is AED 200.

• 11 months of service: no gratuity, because you haven't completed a year.
• 3 years: 3 × 21 = 63 days, so AED 12,600.
• 3 years and 6 months: 3.5 × 21 = 73.5 days, so AED 14,700.
• 7 years: (5 × 21) + (2 × 30) = 165 days, so AED 33,000.

In every case, the total can't pass two years' wage, and unpaid absence days come off your service first.

Saudi Arabia: half a month, then a full month

The Labor Law, as published by the Ministry of Human Resources and Social Development (HRSD), says (HRSD, Labor Law, Articles 84 to 88):

• When the employment relationship ends, the employer pays an end-of-service award of half a month's wage for each of the first five years of service, and one month's wage for each year after that. "The last wage received shall be the basis for calculating the award", and you are owed a pro-rata award for fractions of a year (Article 84).
• If the relationship ends because you resign, you get one third of the award after at least two and at most five years of continuous service, two thirds after more than five years but under ten, and the full award after ten years or more (Article 85).
• You and the employer may agree that commissions, sales percentages and similar parts of the wage that go up and down are left out of the wage used for the award (Article 86).
• You get the full award, whatever Article 85 says, if you leave because of force majeure beyond your control. A female worker also gets the full award if she ends the contract within six months of her marriage contract or within three months of giving birth (Article 87).
• The employer pays your wages and settles your entitlements within one week of the contract ending, or within two weeks if you were the one who ended it. The employer may deduct any debt you owe because of the work (Article 88).

Resigning before two years. Article 85's first band starts at two years of continuous service. If you resign before that, it gives you no share of the award.

Leaving without notice and keeping your rights. Article 81 lists cases in which you may leave work without notice "while retaining all their statutory rights": for example, if the employer fails its essential contractual or statutory obligations to you, deceived you about the terms of work when you were hired, or treats you harshly, unjustly or humiliatingly. If you think your case fits, ask HRSD before you leave how it affects your award.

When the employer can withhold it. Article 80 lists cases in which the employer may end the contract without an award, notice or compensation, such as resorting to forgery to get the job, assault at work, or disclosing industrial or commercial secrets of the work. The employer must give you the chance to state your reasons for objecting.

Which wage. Article 84 uses your last wage. The Labor Relations section we cite doesn't break "wage" down into basic salary and allowances, so check the wage figure in your contract and payslip before you count, and ask HRSD if the employer uses a different figure. If you are on probation, our probation guide explains that you aren't owed an award for that period if the contract ends during it (Article 54).

A worked example (Saudi Arabia, illustrative figures)

Suppose, for illustration only, that your last monthly wage is SAR 8,000.

• 3 years: 3 × half a month = 1.5 months, so SAR 12,000. If you resign: one third, SAR 4,000.
• 7 years: (5 × half a month) + (2 × one month) = 4.5 months, so SAR 36,000. If you resign: two thirds, SAR 24,000.
• 12 years: 2.5 + 7 = 9.5 months, so SAR 76,000, and the same if you resign.
• 1 year and 8 months, and you resign: nothing under Article 85.

Checklist before you resign or sign

1. Count your continuous service from your start date. In the UAE, take out unpaid absence days.
2. In the UAE, find your basic salary on the contract or payslip. Allowances don't count.
3. In Saudi Arabia, find your last wage, and check whether the contract leaves commissions out of it (Article 86).
4. Work out the full amount: 21 then 30 days' basic wage per year in the UAE, half a month then a month per year in Saudi Arabia.
5. In Saudi Arabia, if you plan to resign, check your band: under two years, two to five, over five and under ten, or ten and over. Waiting until a band boundary can change the amount.
6. In the UAE, check whether your employer has enrolled you in the Savings Scheme, and from when.
7. Note the payment deadline: 14 days in the UAE; one week in Saudi Arabia, or two weeks if you resigned.
8. If the amount or the date is wrong, raise it with MOHRE or HRSD.

FAQ

How is end-of-service gratuity calculated in the UAE? On your last basic wage: 21 days' wage for each of the first five years and 30 days' wage for each year after that, with parts of a year counted pro rata once you have completed one year. The total may not exceed two years' wage (Article 51).

Is UAE gratuity calculated on basic salary or total salary? Basic salary. The government portal says it doesn't include allowances such as housing, transport, utilities or furniture.

Do I get gratuity if I resign in the UAE? Article 51 has no separate scale for resignation: the gratuity depends on your length of service and basic wage, and you need at least one year of continuous service.

What is the maximum gratuity in the UAE? Two years' wage (Article 51).

Do I get end-of-service benefits if I resign in Saudi Arabia? After at least two years of continuous service, yes: one third of the award for two to five years, two thirds for more than five and under ten, and the full award for ten years or more (Article 85). Under two years, Article 85 gives no share.

How is end-of-service calculated in Saudi Arabia? Half a month's wage for each of the first five years and a month's wage for each year after that, based on your last wage, with fractions of a year pro rata (Article 84).

How long does the employer have to pay my end-of-service? In the UAE, 14 days from the end of the contract (Article 53). In Saudi Arabia, one week, or two weeks if you ended the contract (Article 88).

Do UAE nationals get the same gratuity? No. A UAE national's end-of-service gratuity follows the pensions and social security legislation (Article 51).

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Related: Probation period in the UAE, Saudi Arabia and Egypt · Expected salary and notice period: how to answer (UAE, KSA) · Experience certificate in the UAE, Saudi Arabia and Egypt · How to apply for jobs in the UAE · How to apply for jobs in Saudi Arabia.

Sources

• UAE, Federal Decree-Law No. 33 of 2021 Regulating Labour Relations, Articles 51, 53, 68, 73 and 74 (UAE Legislation portal): uaelegislation.gov.ae · Arabic version (opens in a browser; it may block automated requests)
• UAE Government portal (u.ae), End of service benefits for workers in the private sector (basic wage, under one year, part-time, Savings Scheme; updated 15 October 2026): u.ae
• UAE Government portal (u.ae), Working in free zones: u.ae
• Saudi Arabia, Labor Law, Articles 54, 80, 81 and 84 to 88 (Ministry of Human Resources and Social Development): hrsd.gov.sa · Arabic version