End-of-Service Gratuity in the Gulf: UAE vs Saudi Arabia Explained
Leaving a Gulf job? Your end-of-service payout follows precise legal formulas — and resigning affects UAE and Saudi differently. Here's how to get every dirham and riyal you're owed.
Official source — verify hereUAE MOHRE — Ministry of Human Resources ↗End-of-service benefits (gratuity) are one of the most valuable — and most misunderstood — parts of working in the Gulf. Employers don't always calculate them correctly, so knowing the rules protects real money. Here's how the UAE and Saudi Arabia compare in 2026.
UAE: how gratuity works
Under the UAE Labour Law (Federal Decree-Law No. 33 of 2021):
- 21 days of basic salary for each of the first five years
- 30 days of basic salary for each year beyond five
- Calculated on basic salary only — housing and other allowances are excluded
- Capped at two years' total basic pay
- Since 2022, resigning no longer reduces your gratuity — you get the full amount whether you resign or are terminated, as long as you completed one year
Check your figure with our UAE Gratuity Calculator.
Saudi Arabia: how it differs
Under the Saudi Labour Law (Articles 84–87):
- Half a month's wage per year for the first five years
- One full month's wage per year after five years
- Based on your last wage (commonly basic + housing, per your contract)
- Resignation reduces the award under Article 85: under 2 years = nothing; 2–5 years = one-third; 5–10 years = two-thirds; 10+ years = full amount
- If the employer ends the contract, you get the full award regardless of length
Check yours with our Saudi End of Service Calculator.
The key difference at a glance
The biggest practical difference: in the UAE, resigning doesn't cut your gratuity; in Saudi Arabia, it can — a lot, especially if you leave before five years. If you're in Saudi and close to a threshold (2, 5 or 10 years), the timing of your resignation can be worth thousands of riyals.
What salary counts?
This is where disputes happen. In the UAE it's strictly basic salary. In Saudi practice it's usually basic plus housing allowance, but companies define the "wage" differently — always check your contract. If your basic is artificially low with large allowances, your gratuity will be lower than your total package suggests.
Making sure you're paid correctly
- Calculate your own figure before the final settlement meeting.
- Know your exact start date and any unpaid leave (which is excluded from service time).
- In the UAE, entitlements are due promptly at the end of employment; in Saudi, within one to two weeks.
- If the figure is wrong, raise it with HR, then MOHRE (UAE) or HRSD (Saudi) if needed.
Frequently asked questions
Do I lose gratuity if I resign in the UAE?
No. Since the 2022 labour law, resigning and being terminated give the same full gratuity, provided you completed at least one year of service. The old rule that penalised resignation was abolished.
Do I lose gratuity if I resign in Saudi Arabia?
Possibly. Under Article 85, resigning before 2 years means no award; 2–5 years gives one-third; 5–10 years gives two-thirds; 10+ years gives the full amount. If the employer ends the contract, you receive the full award regardless.
Is gratuity based on basic salary or total salary?
In the UAE, strictly basic salary — allowances are excluded. In Saudi Arabia it's the last wage, commonly basic plus housing, but this depends on how your contract defines the wage. Always check your contract, as a low basic means a lower payout.
What if my employer calculates it wrong?
Calculate your own entitlement first using the legal formula, then raise any discrepancy with HR. If it isn't resolved, you can escalate to MOHRE in the UAE or HRSD in Saudi Arabia, which handle labour disputes.
References & official sources
Always confirm current rules, fees and eligibility on the official government sites below — they are the authoritative source, and this guide is only a plain-English summary.
Related tools
⚠️ Immigration rules and fees change frequently. This guide is for general information — always confirm the latest details with the official embassy, consulate or government website before you apply or travel.