How end-of-service pay actually works across the Gulf
The calculator above gives you a number. This section explains where each country's number comes from, so you can check it against your own settlement.
The six formulas
All six Gulf states pay a lump sum when employment ends, but the rate, the salary it's based on, and whether resigning costs you anything all differ by country.
Saudi Arabia — Labour Law Article 84
(0.5 × Actual Wage × years up to 5) + (1.0 × Actual Wage × years beyond 5)
Actual Wage = basic pay + fixed allowances (housing, transport). Resignation is reduced under Article 85.
UAE — Decree-Law 33/2021, Article 51
(basic ÷ 30 × 21 × years up to 5) + (basic ÷ 30 × 30 × years beyond 5), capped at 24 months' basic
Basic salary only. No reduction for resigning. Minimum 1 year of service.
Qatar — Labour Law 14/2004, Article 54
basic ÷ 30 × 21 × total years of service (flat rate, every year)
Basic salary only. No step-up after 5 or 10 years, despite what older calculators show. No reduction for resigning.
Kuwait — Labour Law 6/2010, Articles 51 & 53
(basic ÷ 26 × 15 × years up to 5) + (basic ÷ 26 × 30 × years beyond 5), capped at 18 months' basic
Basic salary only, over a 26-day working month. Resignation is reduced under Article 53.
Bahrain — Labour Law 36/2012, Article 116
(0.5 × basic × years up to 3) + (1.0 × basic × years beyond 3)
Basic salary only. No reduction for resigning. Funded via monthly SIO contributions since 1 March 2024.
Oman — Royal Decree 53/2023, Article 61
Old formula (15/30-day tiers) for service to 31 Jul 2023, then 1 full basic salary per year after
Basic salary only. No reduction for resigning. Service that straddles 31 July 2023 is split and each portion calculated under its own law.
Worked examples
Saudi Arabia
A worker on an Actual Wage of SAR 9,000 is let go after 6 years and 3 months. First 5 years: 0.5 × 9,000 × 5 = SAR 22,500. The remaining 1.25 years at the full-month rate: 1.0 × 9,000 × 1.25 = SAR 11,250.
Total: SAR 33,750.00
UAE
A worker on a basic salary of AED 10,000 completes 7 years. Daily wage: 10,000 ÷ 30 = AED 333.33. First 5 years: 333.33 × 21 × 5 = AED 35,000. Remaining 2 years: 333.33 × 30 × 2 = AED 20,000. How the contract ended makes no difference to this figure.
Total: AED 55,000.00
Qatar
A worker on a basic salary of QAR 6,500 completes 4 years and 6 months. Daily wage: 6,500 ÷ 30 = QAR 216.67. Gratuity: 216.67 × 21 × 4.5 years. The rate stays flat at 21 days per year regardless of tenure.
Total: QAR 20,475.00
Kuwait
A worker on a basic salary of KWD 350 is terminated after 7 years. Daily wage: 350 ÷ 26 = KWD 13.46. First 5 years: 13.46 × 15 × 5 = KWD 1,009.62. Remaining 2 years: 13.46 × 30 × 2 = KWD 807.69.
Total: KWD 1,817.31
Bahrain
A worker on a basic salary of BHD 400 completes 4 years, either by resignation or termination — Bahrain treats them the same. First 3 years: 0.5 × 400 × 3 = BHD 600. The 4th year: 1.0 × 400 × 1 = BHD 400.
Total: BHD 1,000.00
Oman
A worker on a basic salary of OMR 500 works from 1 August 2021 to 1 August 2025 — a span that straddles the 31 July 2023 law change. The first 2 years (to the cutoff) are paid at the old half-month rate: OMR 499.71. The next 2 years (from the cutoff) are paid at the new full-month rate: OMR 1,001.37.
Total: OMR 1,501.08
Where these calculations go wrong
1
Saudi Arabia — using basic pay instead of Actual Wage. Article 84 is based on basic pay plus fixed allowances like housing and transport. Leaving allowances out understates the result; rounding partial years down instead of pro-rating them does the same.
2
UAE — using total salary, or forgetting the cap. Article 51 uses basic salary only, so including allowances overstates the figure. Long-serving employees can also hit the two-years'-basic ceiling, beyond which extra years add nothing.
3
Qatar — assuming the rate rises after five or ten years. That was true under the old law. The current Article 54 pays a flat three weeks per year for every year, with no step-up — a lot of calculators online still show the old tiers.
4
Kuwait — dividing by 30 instead of 26, or forgetting the cap. Kuwaiti payroll conventionally uses a 26-day working month for this calculation, not the 30-day convention used elsewhere in the Gulf. Total indemnity is also capped at 18 months' basic salary.
5
Bahrain — assuming resignation reduces the payout. It doesn't, under the current law. The other common gap is not knowing that, since March 2024, this is claimed from Bahrain's Social Insurance Organisation rather than paid directly by the employer as a lump sum.
6
Oman — applying the new flat rate to service from before 31 July 2023. Only service from that date onward gets the new one-month-per-year rate. Earlier service still uses the old 15-day/30-day tiers, so the two portions have to be calculated separately and added together.
Common questions
Is gratuity based on basic salary or total salary?
In Saudi Arabia it's the Actual Wage — basic pay plus fixed allowances such as housing and transport. In the other five countries (UAE, Qatar, Kuwait, Bahrain, Oman) it's basic salary only, with allowances excluded.
Does resigning reduce my gratuity?
It depends on the country. Saudi Arabia and Kuwait both reduce the payout on resignation in tiers based on years of service. The UAE, Qatar, Bahrain and Oman all pay the same amount whether you resign or are terminated, once the minimum service period is met.
Is there a cap on the total amount?
The UAE caps total gratuity at two years' basic salary, and Kuwait caps it at 18 months' basic salary. Saudi Arabia, Qatar, Bahrain and Oman set no equivalent ceiling.
What's the minimum service period to qualify?
The UAE, Qatar and Oman require at least one full year. Kuwait requires one year for termination, but resigning before three years pays nothing at all. Saudi Arabia pays a termination award from day one, pro-rated, though resigning before two years pays nothing. Bahrain's law doesn't set an explicit minimum.
What happens if I'm dismissed for misconduct?
All six countries allow an employer to withhold the award for serious misconduct — under narrow, specific grounds in each country's law (for example Article 80 in Saudi Arabia, Article 44 in the UAE, and Article 107 in Bahrain). A disputed dismissal can usually be raised with the relevant labour ministry.
Why did Oman's gratuity calculation change in 2023?
Oman's new Labour Law (Royal Decree 53/2023) raised the rate to one full basic salary per year of service, effective 31 July 2023. Service earned before that date is still calculated under the older 15-day/30-day formula, so anyone employed before mid-2023 has their gratuity split across both rules.
Why is Bahrain's gratuity paid by the SIO instead of my employer?
Since 1 March 2024, Bahraini employers pay monthly contributions into the Social Insurance Organisation (SIO) for expatriate staff rather than accruing the amount internally. The entitlement itself still accrues the same way under Article 116 — you just claim it from the SIO when you leave, instead of receiving it as a lump sum from your employer.
Does Kuwait really use a 26-day month instead of 30?
Yes. Kuwaiti payroll conventionally treats 26 as the number of working days in a month for this calculation (one rest day a week), so basic salary is divided by 26, not 30, to get the daily rate used in the indemnity formula.
Does Qatar's rate really stay flat, or does it increase for longer service?
It stays flat. An older version of Qatar's law paid more after five and ten years of service, but the current Article 54 pays three weeks of basic salary per year for every year, with no increase — regardless of how long you've worked there.
How accurate is this calculator?
It follows each country's statutory formula as closely as possible, but it's an estimate, not a legal document. Employer policies, contract terms, unpaid leave, and disputed dismissals can all change your actual settlement — confirm the final figure with your employer and, if needed, the relevant labour ministry.
Figures follow Saudi Labour Law Articles 84, 85 and 87; UAE Federal Decree-Law 33 of 2021, Articles 51–53; Qatar Labour Law 14 of 2004, Article 54; Kuwait Labour Law 6 of 2010, Articles 51 and 53; Bahrain Labour Law 36 of 2012, Article 116; and Oman Royal Decree 53/2023, Article 61. Labour law changes — confirm your final settlement with the relevant ministry or a labour lawyer before relying on it.
