Regional Analysis Disclaimer: This comparison provides general information about gratuity and end-of-service benefit laws across GCC countries as of November 2025. Laws and regulations vary significantly by country and may change. For country-specific legal advice, consult local labour authorities or qualified employment lawyers. This article focuses on private sector employment regulations.

GCC Comparison: Gratuity Laws in Saudi Arabia, Qatar, and Oman

For expatriates and employers operating across the Gulf Cooperation Council (GCC) region, understanding the variations in end-of-service benefit laws is crucial for career planning and workforce management. While all GCC countries mandate end-of-service gratuity payments, the calculation methods, eligibility criteria, and payment conditions differ significantly. This comprehensive guide compares UAE gratuity laws with those of Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain, helping you understand your entitlements regardless of where you work in the Gulf region.

Quick Comparison Table

| Country | Minimum Service | Calculation Basis | Formula (First 5 Years) | Formula (After 5 Years) | Max Cap | |---------|----------------|-------------------|-------------------------|-------------------------|---------| | UAE | 1 year | Last basic salary | 21 days per year | 30 days per year | 2 years salary | | Saudi Arabia | 2 years | Last basic salary | 15 days per year | 30 days per year | None | | Qatar | 1 year | Basic salary | 21 days per year | 30 days per year | None | | Oman | 1 year | Last drawn wage | 15 days per year | 30 days per year | None | | Kuwait | 1 year | Full salary | 15 days per year | 30 days per year | 18 months salary | | Bahrain | 1 year | Last basic salary | 15 days per year | 30 days per year | None |

United Arab Emirates (UAE)

Legal Framework

• Governing Law: Federal Decree-Law No. 33 of 2021
• Authority: Ministry of Human Resources and Emiratisation (MOHRE)

Eligibility

• Minimum service: 1 year completed
• Contract types: Both limited and unlimited
• Resignation impact: If employee resigns with less than 5 years service, gratuity is reduced

Calculation Method

Years 1-5:

• Formula: (Basic Salary ÷ 30) × 21 × Number of Years
• Resignation: Same as termination if 1-3 years; two-thirds if 3-5 years
• Termination by employer: Full entitlement

Years 5+:

• Formula: (Basic Salary ÷ 30) × 30 × Number of Years (for years beyond 5)
• Example: After 7 years: (5 years × 21 days) + (2 years × 30 days)

Key Features

• Payment deadline: 14 days from last working day
• Maximum cap: 2 years total basic salary
• Salary component: Basic salary ONLY (no allowances)
• Partial years: Pro-rated to the day

Unique Aspects

• Strong MOHRE enforcement mechanisms
• Digital complaint system
• Fast-track dispute resolution
• Detailed regulations on deductions

Learn more: How to calculate gratuity in UAE

Saudi Arabia (KSA)

Legal Framework

• Governing Law: Saudi Labour Law (Royal Decree M/51, 2005, updated 2015)
• Authority: Ministry of Human Resources and Social Development (MHRSD)

Eligibility

• Minimum service: 2 years completed (stricter than UAE)
• Less than 2 years: No gratuity entitlement (major difference)
• Contract types: Both limited and unlimited

Calculation Method

Years 1-5:

• Formula: (Basic Salary ÷ 30) × 15 × Number of Years
• Half the UAE rate for first 5 years

Years 5+:

• Formula: (Basic Salary ÷ 30) × 30 × Number of Years (same as UAE after year 5)

Example Calculation:

• Basic Salary: SAR 8,000/month
• Service: 6 years
• Calculation: (8,000 ÷ 30) × [(5 × 15) + (1 × 30)]
• Result: 266.67 × 105 = SAR 28,000

Key Features

• No maximum cap (unlike UAE's 2-year limit)
• Resignation penalty: Employee who resigns receives:
  • After 2-5 years: One-third of entitlement
  • After 5-10 years: Two-thirds of entitlement
  • After 10+ years: Full entitlement
• Payment deadline: Within 1 week of contract end
• Salary component: Basic salary only

Unique Aspects

• Longer minimum service requirement (2 years vs UAE's 1 year)
• Harsher resignation penalties for employees with 2-5 years service
• No cap benefits long-serving employees significantly
• Different limited contract rules than UAE

Key Difference: In Saudi Arabia, if you resign after 4 years, you receive only one-third of calculated gratuity. In UAE, you'd receive two-thirds after 3+ years.

Qatar

Legal Framework

• Governing Law: Qatar Labour Law No. 14 of 2004 (amended 2017, 2020)
• Authority: Ministry of Labour

Eligibility

• Minimum service: 1 year completed (same as UAE)
• Contract types: Both limited and unlimited

Calculation Method

Years 1-5:

• Formula: (Basic Salary ÷ 30) × 21 × Number of Years
• Identical to UAE formula

Years 5+:

• Formula: (Basic Salary ÷ 30) × 30 × Number of Years
• Identical to UAE formula

Example Calculation:

• Basic Salary: QAR 10,000/month
• Service: 4 years
• Calculation: (10,000 ÷ 30) × 21 × 4
• Result: 333.33 × 84 = QAR 28,000

Key Features

• No maximum cap (Qatar employees with 15+ years can earn more than UAE colleagues)
• Resignation rules: Similar to UAE - full entitlement if 5+ years
• Payment deadline: 21 days from contract end (longer than UAE's 14 days)
• Salary component: Basic salary only

Unique Aspects

• Most similar to UAE gratuity system
• No cap benefits long-tenured employees
• Recent reforms focused on worker mobility and rights
• Wage Protection System (WPS) ensures timely payment

Key Difference: Qatar's calculation is nearly identical to UAE, but no 2-year cap means employees with 10+ years service receive significantly more in Qatar.

Oman

Legal Framework

• Governing Law: Oman Labour Law (Royal Decree 35/2003, updated by RD 53/2011)
• Authority: Ministry of Manpower

Eligibility

• Minimum service: 1 year completed
• Contract types: Both limited and unlimited

Calculation Method

Years 1-5:

• Formula: (Last Drawn Wage ÷ 30) × 15 × Number of Years
• Similar to Saudi Arabia (15 days per year)

Years 5+:

• Formula: (Last Drawn Wage ÷ 30) × 30 × Number of Years

Example Calculation:

• Last Wage: OMR 600/month
• Service: 7 years
• Calculation: (600 ÷ 30) × [(5 × 15) + (2 × 30)]
• Result: 20 × 135 = OMR 2,700

Key Features

• No maximum cap
• Resignation rules: Employee resigning after 3+ years gets full entitlement (more generous than UAE)
• Payment deadline: 15 days from end of employment
• Salary component: "Last drawn wage" (may include some benefits depending on contract)

Unique Aspects

• Uses "wage" rather than "basic salary" - can include regular allowances
• More generous resignation rules for 3-5 year employees
• Strong expat worker protections
• Relatively simple dispute resolution

Key Difference: Oman's 15 days per year for first 5 years is lower than UAE's 21 days, but more generous resignation rules and potential inclusion of allowances can balance this.

Kuwait

Legal Framework

• Governing Law: Kuwait Labour Law (Law No. 6 of 2010)
• Authority: Ministry of Social Affairs and Labour (MOSAL)

Eligibility

• Minimum service: 1 year completed
• Contract types: Limited and unlimited (with distinct rules)

Calculation Method

Years 1-5:

• Formula: (Full Salary ÷ 30) × 15 × Number of Years
• Note: Uses FULL salary including allowances (major difference)

Years 5+:

• Formula: (Full Salary ÷ 30) × 30 × Number of Years

Example Calculation:

• Full Salary: KWD 1,200 (including housing allowance)
• Service: 8 years
• Calculation: (1,200 ÷ 30) × [(5 × 15) + (3 × 30)]
• Result: 40 × 165 = KWD 6,600

Key Features

• Maximum cap: 18 months of full salary
• Uses FULL salary: Includes housing, transport, and regular allowances (huge advantage)
• Resignation penalty: Employees resigning with less than 5 years receive half entitlement
• Payment deadline: Within 1 month
• Indemnity leave: Employees can request advance payment

Unique Aspects

• Only GCC country calculating on full salary rather than basic
• This often results in significantly higher gratuity than other GCC countries
• More complex calculation but much more generous
• Cap of 18 months protects employers from excessive payouts

Key Difference: Kuwait's use of full salary is transformative. An employee earning KWD 1,000 basic + KWD 500 allowances gets gratuity on KWD 1,500. In UAE, they'd only get it on the KWD 1,000 basic.

Bahrain

Legal Framework

• Governing Law: Bahrain Labour Law (Law No. 36 of 2012)
• Authority: Ministry of Labour and Social Development

Eligibility

• Minimum service: 1 year completed
• Contract types: Both limited and unlimited

Calculation Method

Years 1-5:

• Formula: (Basic Salary ÷ 30) × 15 × Number of Years

Years 5+:

• Formula: (Basic Salary ÷ 30) × 30 × Number of Years

Example Calculation:

• Basic Salary: BHD 800/month
• Service: 6 years
• Calculation: (800 ÷ 30) × [(5 × 15) + (1 × 30)]
• Result: 26.67 × 105 = BHD 2,800

Key Features

• No maximum cap
• Resignation: Full entitlement regardless of years served (most generous resignation rule)
• Payment deadline: Within 1 week of contract end
• Salary component: Basic salary only

Unique Aspects

• Most employee-friendly resignation rules in GCC
• No penalty for resigning at any tenure
• Strong labour court enforcement
• Clear regulations on allowances vs basic salary

Key Difference: Bahrain's full gratuity for resignations at any tenure is unique. A UAE employee resigning after 2 years gets reduced gratuity; Bahrain employee gets full amount.

Detailed Comparison: Key Factors

1. Minimum Service Requirement

Most Generous:

• 🥇 UAE, Qatar, Oman, Kuwait, Bahrain: 1 year
• 🥉 Saudi Arabia: 2 years

Impact: In Saudi Arabia, employees leaving after 18 months get nothing. In other GCC countries, they'd receive 1.5 years worth of gratuity.

2. Calculation Rate (First 5 Years)

Most Generous:

• 🥇 UAE, Qatar: 21 days per year
• 🥈 Saudi Arabia, Oman, Kuwait, Bahrain: 15 days per year

Impact: After 3 years in UAE/Qatar, you get 63 days of salary. In Saudi/Oman/Kuwait/Bahrain, only 45 days.

3. Salary Component Used

Most Generous:

• 🥇 Kuwait: Full salary (basic + allowances)
• 🥇 Oman: Last drawn wage (may include some allowances)
• 🥈 Others: Basic salary only

Impact: Kuwait employee with 50% of pay in allowances gets 50% more gratuity than counterparts in other GCC countries.

4. Maximum Cap

Most Generous:

• 🥇 Qatar, Saudi Arabia, Oman, Bahrain: No cap
• 🥈 Kuwait: 18 months salary
• 🥉 UAE: 2 years salary

Impact: Long-serving employees (15+ years) benefit significantly more in no-cap countries.

5. Resignation Penalties

Most Generous:

• 🥇 Bahrain: No penalty ever
• 🥇 Qatar, Oman: Full after 3-5 years
• 🥈 UAE: Two-thirds if 3-5 years
• 🥈 Kuwait: Half if under 5 years
• 🥉 Saudi Arabia: One-third if 2-5 years

Impact: Career mobility is easier in Bahrain and Oman where resignation penalties are minimal.

6. Payment Timeline

Fastest:

• 🥇 Saudi Arabia, Bahrain: 7 days
• 🥈 UAE: 14 days
• 🥈 Oman: 15 days
• 🥉 Qatar: 21 days
• 🥉 Kuwait: 30 days

Impact: Faster payment helps with transition expenses and cash flow between jobs.

Real-World Scenarios: Cross-Country Comparison

Scenario 1: Early Career Move (3 Years Service)

Profile:

• Basic Salary: $3,000/month (converted from local currency)
• Service: 3 years
• Reason: Resignation for better opportunity

| Country | Calculation | Resignation Penalty | Final Gratuity | |---------|-------------|---------------------|----------------| | UAE | 21 days × 3 years = 63 days | Two-thirds = 42 days | $4,200 | | Saudi Arabia | 15 days × 3 years = 45 days | One-third = 15 days | $1,500 | | Qatar | 21 days × 3 years = 63 days | Full (after 3 years) | $6,300 | | Oman | 15 days × 3 years = 45 days | Full (after 3 years) | $4,500 | | Kuwait | 15 days × 3 years = 45 days | Half = 22.5 days | $2,250 | | Bahrain | 15 days × 3 years = 45 days | No penalty | $4,500 |

Winner: Qatar ($6,300)
Lowest: Saudi Arabia ($1,500)
UAE Position: Middle-range ($4,200)

Scenario 2: Mid-Career Professional (7 Years Service)

Profile:

• Basic Salary: $5,000/month
• Service: 7 years
• Reason: Company termination (full entitlement)

| Country | Years 1-5 | Years 6-7 | Total Days | Final Gratuity | If Capped | |---------|-----------|-----------|------------|----------------|-----------| | UAE | 105 days | 60 days | 165 days | $27,500 | No (under 2 years salary cap) | | Saudi Arabia | 75 days | 60 days | 135 days | $22,500 | N/A (no cap) | | Qatar | 105 days | 60 days | 165 days | $27,500 | N/A (no cap) | | Oman | 75 days | 60 days | 135 days | $22,500 | N/A (no cap) | | Kuwait* | 75 days | 60 days | 135 days | $33,750 | No (under 18 months cap) | | Bahrain | 75 days | 60 days | 135 days | $22,500 | N/A (no cap) |

*Kuwait calculation assumes full salary of $7,500 (basic $5,000 + allowances $2,500)

Winner: Kuwait ($33,750 due to full salary calculation)
Lowest: Saudi Arabia, Oman, Bahrain (tied at $22,500)
UAE Position: Second place ($27,500)

Scenario 3: Long-Serving Employee (15 Years Service)

Profile:

• Basic Salary: $6,000/month
• Service: 15 years
• Reason: Retirement/resignation

| Country | Total Days Calculation | Gratuity Amount | Impact of Cap | |---------|------------------------|-----------------|---------------| | UAE | 405 days (but capped at 730) | $146,000 | ⚠️ Capped at 2 years | | Saudi Arabia | 375 days | $75,000 | No cap applied | | Qatar | 405 days | $81,000 | No cap applied | | Oman | 375 days | $75,000 | No cap applied | | Kuwait* | 375 days on $9,000 salary | $112,500 | Capped at 18 months = $135,000 | | Bahrain | 375 days | $75,000 | No cap applied |

*Kuwait full salary assumed at $9,000

Winner: UAE ($146,000 - benefits from cap being based on higher rate years 1-5)
Second: Kuwait ($112,500)
Lowest: Bahrain, Oman, Saudi Arabia ($75,000)

Strategic Career Considerations

For Employees Planning GCC Careers

Short-term contracts (1-3 years):

• Best countries: Qatar, Bahrain (no resignation penalties)
• Worst country: Saudi Arabia (high resignation penalty, 2-year minimum)
• UAE position: Moderate

Mid-term contracts (5-7 years):

• Best countries: Kuwait (full salary calculation), Qatar (generous formula)
• UAE position: Competitive

Long-term careers (10+ years):

• Best countries: UAE (cap protects high earnings), Kuwait (if allowances are high)
• Consideration: No-cap countries benefit if salary stays moderate

High allowance packages:

• Best country: Kuwait (only country including allowances)
• All others: Negotiate higher basic salary proportion

For Employers Managing Regional Workforce

Cost Management:

• Lowest gratuity costs: Saudi Arabia (2-year minimum, low initial rate)
• Highest costs: Kuwait (full salary), Qatar (no cap + generous formula)
• UAE: Moderate costs, predictable with cap

Retention Impact:

• Bahrain, Qatar, Oman: Low resignation penalties encourage mobility
• Saudi Arabia: High resignation penalty may trap unhappy employees
• UAE: Balanced approach

Administrative Complexity:

• Simplest: Bahrain, Qatar (straightforward calculations)
• Most complex: Kuwait (full salary tracking)
• UAE: Moderate (calculator tools available)

Common Cross-Border Scenarios

Moving Within GCC: What Happens to Gratuity?

Scenario: You work 3 years in UAE, then move to Qatar for 4 years.

Result:

• UAE gratuity: Calculated and paid when leaving UAE job
• Qatar gratuity: Separate calculation when leaving Qatar job
• No portability between countries
• Each country's gratuity is independent

Working for Multi-GCC Companies

Scenario: Company has offices across GCC; you transfer internally.

Typical Practice:

• Transfer treated as resignation + new hire
• Gratuity paid by country 1 entity
• New gratuity accrual starts in country 2
• Some employers offer "bridge" bonuses to offset

Best Practice: Negotiate continuation of gratuity accrual in transfer terms.

Legal and Dispute Resolution

Enforcement Strength Ranking

Most Employee-Friendly:

1. 🥇 UAE - MOHRE digital systems, fast resolution, strong penalties
2. 🥈 Qatar - Improved post-2017 reforms, Wage Protection System
3. 🥈 Bahrain - Strong labour courts, clear procedures
4. 🥉 Oman - Good but slower processes
5. 🥉 Kuwait - Variable enforcement
6. 🥉 Saudi Arabia - Improving but can be slow

For filing disputes:

• UAE: How to file gratuity disputes in UAE
• Other GCC: Contact country-specific labour ministry

Common Dispute Types by Country

UAE:

• Calculation errors (basic vs gross salary)
• Illegal deductions
• Payment delays beyond 14 days

Saudi Arabia:

• Disputes over 2-year completion
• Resignation penalty applications
• Definition of "termination" vs "resignation"

Kuwait:

• What counts as "full salary"
• Allowance inclusions/exclusions
• Cap calculations

Tax Implications

Good News: All GCC countries are tax-free for personal income, including gratuity.

• No income tax on gratuity in any GCC country
• No withholding from gratuity payments
• Full amount paid to employee

However: Tax implications may arise in your home country:

• Some countries tax foreign income including gratuity
• Consult home-country tax advisor
• Treaty provisions may apply

Future Trends and Potential Reforms

Ongoing Discussions (2025)

UAE:

• Possible pension scheme for long-term expat residents
• Enhanced WPS integration
• AI-powered gratuity verification

Saudi Arabia:

• Reducing minimum service requirement from 2 to 1 year (under discussion)
• Potential end-of-service savings accounts

Qatar:

• Further improvements to worker mobility
• Portable benefits exploration post-World Cup reforms

GCC-Wide:

• Discussions of regional labour mobility agreements
• Potential standardization of some gratuity rules
• Digital cross-border employment frameworks

Practical Tools and Resources

Calculators by Country

• UAE: Use our calculator or step-by-step guide
• Saudi Arabia: Use MHRSD calculator
• Qatar: Ministry of Labour online calculator
• Kuwait: MOSAL gratuity calculator
• Oman: Ministry of Manpower calculator
• Bahrain: MLSD online service

Official Resources

• UAE: MOHRE website
• Saudi Arabia: MHRSD
• Qatar: Ministry of Labour
• Others: Contact respective labour ministries

Conclusion: Which Country is "Best"?

There's no single answer - it depends on your situation:

Best for short-term expats (1-3 years): 🥇 Qatar or Bahrain (no resignation penalties, fair formulas)

Best for long-term careers (10+ years): 🥇 UAE (generous cap) or Kuwait (full salary)

Best for high-allowance packages: 🥇 Kuwait (only country including allowances)

Best for early-career mobility: 🥇 Bahrain (zero resignation penalty ever)

Most balanced overall: 🥇 UAE (strong enforcement, fair formula, reasonable cap)

The UAE offers a strong middle-ground with excellent enforcement, digital tools like our gratuity calculator, and predictable rules under Federal Decree-Law No. 33 of 2021. While some GCC countries may be more generous in specific scenarios, UAE's combination of fair treatment, efficient dispute resolution, and clear regulations makes it attractive for both employees and employers.

For an instant end-of-service estimate, use our online gratuity calculator UAE.

Related Resources

Understanding UAE Gratuity:

• Complete guide to UAE gratuity calculation
• UAE labour law 2025 overview
• Eligibility requirements
• Resignation vs termination impact

Regional Context:

• UAE labour market trends 2025
• Expat gratuity considerations
• Calculator comparison across Gulf

For HR Professionals:

• Record-keeping requirements
• Common calculation errors
• Final settlement templates

Sources:

• UAE Federal Decree-Law No. 33 of 2021
• Saudi Labour Law (Royal Decree M/51)
• Qatar Labour Law No. 14 of 2004
• Oman Labour Law (RD 35/2003, updated RD 53/2011)
• Kuwait Labour Law No. 6 of 2010
• Bahrain Labour Law No. 36 of 2012
• Labour ministry publications and official calculators (2025)

Last Updated: November 6, 2025