End of Service Gratuity Calculation in UAE, Saudi Arabia, Oman & Bahrain: Complete Gulf Guide

When leaving employment in the Gulf, your End of Service Gratuity (Severance Pay / Final Settlement) is your statutory legal right. UAE, Saudi Arabia, Oman, and Bahrain have specific legal formulas to calculate gratuity, protect workers from unlawful deductions, and enforce immediate disbursement upon visa cancellation.

1. 🇦🇪 UAE Gratuity Formula (Federal Decree Law No. 33)

Under UAE Labor Law, full-time employees who have completed at least 1 continuous year of service are entitled to gratuity calculated on their Basic Salary (excluding allowances):

• First 5 years of service: 21 days' basic salary for each year of service.
• Service exceeding 5 years: 30 days' basic salary for each additional year.
• Total cap: Gratuity cannot exceed 2 full years' gross salary.

2. 🇸🇦 Saudi Arabia Gratuity Formula (Labor Law Article 84)

Under Article 84 of the Saudi Labor Law, severance compensation is calculated as follows:

• First 5 years of service: Half a month's wage (15 days' basic salary) for each of the first 5 years.
• Subsequent years: One full month's wage for each subsequent year after the 5th year.

3. 🇴🇲 Oman Gratuity Formula (Royal Decree No. 53/2023)

Under Article 61 of the new Oman Labour Law (promulgated by Sultani Decree No. 53/2023):

• Expatriate employees who have completed at least 1 full year of continuous service receive one full month's basic wage for every single year of service.
• Unlike earlier regulations that offered only 15 days for initial years, the updated 2023 decree guarantees a full month's wage for each year without an arbitrary maximum cap.
• Fractions of a year are calculated proportionally.

4. 🇧🇭 Bahrain Gratuity Formula (Labour Law Act 36, Article 116)

Under Article 116 of the Bahrain Private Sector Labour Law (Law No. 36 of 2012):

• First 3 years of service: Half a month's wage (15 days' salary) for each of the first three years.
• Subsequent years: One full month's wage for each following year of service thereafter.
• Calculated on the basis of the last received basic wage plus social allowance (if any).

5. Resignation vs. Termination Rules Across Countries

• 🇦🇪 UAE: Full 100% gratuity is payable regardless of resignation or termination once 1 continuous year is completed.
• 🇸🇦 Saudi Arabia: If the worker resigns: between 2–5 years of service, receives 1/3 of the gratuity; between 5–10 years, receives 2/3; after 10 years, receives 100%.
• 🇴🇲 Oman: Entitled to full gratuity payout upon contract expiry or resignation with statutory notice.
• 🇧🇭 Bahrain: Full entitlement upon contractual termination; subject to standard notice period compliance.

6. Illegal Deductions to Watch Out For

In all 4 countries, employers are strictly prohibited from deducting visa renewal fees, medical test expenses, air tickets, or recruitment commission from your gratuity. Only documented company salary loans or official judicial attachments can be legally deducted.

7. How to File an Unpaid Gratuity Claim

If your employer fails to release your final dues within 14 days of contract completion, file an immediate complaint with your local labour authority before signing any clearance declaration:

• 🇦🇪 UAE: MOHRE Helpline 800 60 or mohre.gov.ae
• 🇸🇦 Saudi Arabia: Qiwa Portal / MHRSD Helpline 19911
• 🇴🇲 Oman: Ministry of Labour Helpline 800 77000 or mol.gov.om
• 🇧🇭 Bahrain: LMRA Expat Protection Centre 995 or lmra.gov.bh