Gratuity & End of Service

End of service gratuity is the one payment almost every Gulf employer eventually gets wrong. It accrues quietly for years, it is calculated on a definition of salary narrower than most people assume, and it falls due at the moment the relationship is most strained.

These guides set out the calculation country by country. The general pattern across the region is a number of days of pay for each year of service, rising after a threshold of five years, based on final basic salary rather than the full package. Every detail in that sentence changes depending on where the employee sits.

We cover who qualifies and who does not: minimum service periods, probation, fixed-term contracts and the treatment of unpaid leave in service calculations. There is guidance on how resignation differs from termination, because in several jurisdictions an employee who resigns before a certain point receives a reduced entitlement or none at all.

You will also find the newer schemes replacing the traditional lump sum. Saudi Arabia and the UAE have both moved parts of the workforce towards savings and investment arrangements, and the DIFC runs its own funded plan. These change what you set aside each month rather than what you pay at exit.

Because end of service gratuity is an accruing liability rather than a one-off expense, we also cover provisioning: what to accrue monthly, how auditors expect it presented, and what happens to the obligation when a business is sold or an employee transfers between group companies.