How it works
End-of-service gratuity (EOSB) is a statutory financial entitlement guaranteed to private-sector and non-pensionable employees upon termination, contract expiry, or resignation. Because labor codes across the Middle East differ on whether gratuity is calculated on gross wage or basic wage—and apply different multipliers when an employee resigns—this multi-country calculator applies the exact statutory rule for Saudi Arabia, the UAE, Egypt, Kuwait, Qatar, Bahrain, and Oman.
Statutory Gratuity Formulas by Country (2026)
The table below compares the official accrual rates for the first five years versus subsequent years, the wage base used in the formula, and the resignation adjustment rules:
| Country & Governing Law | First 5 Years | After Year 5 | Resignation Entitlement |
|---|---|---|---|
| Saudi Arabia (Labor Law Art. 84, 85, 87) | 15 days / year (0.5 month) | 30 days / year (1.0 month) | 0% under 2 yrs; 1/3 for 2–5 yrs; 2/3 for 5–10 yrs; 100% at 10+ yrs |
| United Arab Emirates (Decree-Law 33/2021) | 21 days basic / year | 30 days basic / year | 100% of accrued award after completing 1 continuous year (capped at 2 years’ wage) |
| Egypt (Labor Law No. 12 of 2003, Art. 126) | 0.5 month / year | 1.0 month / year | Statutory severance for post-60 service or uncompensated termination |
| Kuwait (Private Sector Law No. 6 of 2010) | 15 days / year | 30 days / year (max 1.5 yrs) | 0% under 3 yrs; 50% for 3–5 yrs; 2/3 for 5–10 yrs; 100% at 10+ yrs |
| Qatar (Labor Law No. 14 of 2004, Art. 54) | 21 days basic / year | 21 days basic / year | 100% of accrued minimum after 1 full year of service |
| Bahrain (Law No. 36 of 2012 / SIO) | 15 days / year | 30 days / year | 100% of accrued statutory balance (collected via SIO since March 2024) |
| Oman (Labor Law Royal Decree 53/2023) | 30 days basic / year | 30 days basic / year | Full month per year from Year 1 after the 2023 reform |
How Resignation vs. Termination Affects Your Payout
- Employer Termination or Contract Expiry (Article 84): Whenever the employer ends the contract without gross misconduct, or a fixed-term contract expires naturally, the employee receives 100% of the accrued award regardless of whether tenure is 1 year or 20 years.
- Voluntary Resignation (Article 85 in Saudi Arabia): If an employee resigns from an indefinite contract, tenure under 2 years yields zero gratuity; tenure from 2 to less than 5 years yields one-third (33.33%); tenure from 5 to less than 10 years yields two-thirds (66.67%); and 10 or more years yields 100%.
- Force Majeure, Retirement, or Marriage/Childbirth (Article 87): An employee who resigns due to force majeure beyond their control, or a female employee who resigns within 6 months of marriage or 3 months of childbirth, is legally entitled to 100% of the full award.
An employee earning a total monthly wage of 10,000 SAR completes 8 years of service with 15 unused annual leave days:
- First 5 years award: 5 × (10,000 × 0.5) = 25,000.00 SAR.
- Remaining 3 years award: 3 × 10,000 = 30,000.00 SAR.
- Full Statutory Award (100% upon contract expiry/termination): 55,000.00 SAR.
- If Resigning Voluntarily (5 to <10 years = 2/3): 55,000 × (2/3) = 36,666.67 SAR.
- Unused Leave Cash Payout (15 days): (10,000 ÷ 30) × 15 = 5,000.00 SAR.
Which Wage Components Enter the Gratuity Base?
In Saudi Arabia and Egypt, gratuity is computed on the employee’s last gross fixed wage (basic salary plus fixed housing, transport, and regular fixed allowances, excluding variable overtime or discretionary bonuses). In the UAE, Qatar, and Oman, the statutory formula specifies the last basic salary excluding allowances. You can also enter your unused annual leave balance to combine your gratuity and leave encashment into one final settlement total.
Calculate your exact unused vacation balance with the /en/annual-leave-calculator, verify your monthly pension deductions with the /en/gosi-calculator, break down your gross-to-net package using the /en/salary-calculator, and price unpaid extra hours with the /en/overtime-calculator.