What is Gratuity in Gulf Countries?

Gratuity is a mandatory end-of-service benefit paid by employers to employees in Gulf Cooperation Council (GCC) countries when they leave their job after completing a minimum period of service.

In Gulf countries, gratuity is governed by local labor laws and typically calculated based on basic salary. The calculation formulas vary slightly between countries but generally follow similar principles.

Our calculator supports all major Gulf countries including UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman, each with their specific calculation formulas.

How Gratuity Works in Gulf Countries

AEUAE Gratuity Formula

21 days of basic salary per year for the first 5 years, and 30 days per year after 5 years. Daily wage = Basic Salary ÷ 30. Maximum cap: 2 years of total basic salary.

Minimum service: 1 year

SASaudi Arabia Formula

Half month salary per year of service. Minimum 2 years of service required.

Minimum service: 2 years

QAQatar, Bahrain Formula

21 days for first 5 years, 30 days after. Similar to UAE calculation method.

Minimum service: 1 year

KWKuwait, Oman Formula

15 days per year of service. Minimum 1 year of service required.

Minimum service: 1 year

Gratuity Calculation Examples

Example: UAE Gratuity (3 Years)

Basic Salary: AED 10,000/month

Years of Service: 3 years

Calculation:

Daily wage = 10,000 ÷ 30 = 333.33 AED. Gratuity = 21 days × 3 years × 333.33 = 21,000 AED

Example: UAE Gratuity (7 Years)

Basic Salary: AED 15,000/month

Years of Service: 7 years

Calculation:

First 5 years: 21 days × 5 × 500 = 52,500 AED. Next 2 years: 30 days × 2 × 500 = 30,000 AED. Total: 82,500 AED

Gulf Countries Gratuity Comparison

AspectUaeSaudiQatarKuwaitBahrainOman
Minimum Service1 year2 years1 year1 year1 year1 year
Formula (First 5 Years)21 days/yearHalf month/year21 days/year15 days/year21 days/year15 days/year
Formula (After 5 Years)30 days/yearHalf month/year30 days/year15 days/year30 days/year15 days/year
Salary BasisBasic onlyBasic onlyBasic onlyBasic onlyBasic onlyBasic only

Tips & Best Practices

📋 Keep Employment Records

Maintain copies of your employment contract, salary slips, and service certificates. These are essential when claiming gratuity in Gulf countries.

💰 Understand Basic Salary

In Gulf countries, gratuity is calculated only on basic salary, excluding housing, transport, and other allowances. Know what constitutes your basic salary.

Calculate Before Resigning

Use our calculator before making career decisions. Understanding your gratuity entitlement helps with financial planning.

Verify with HR

While our calculator provides accurate estimates, always verify the final amount with your HR department before leaving.

Why Use Our Calculator?

Multi-Country Support

Calculate gratuity for all major Gulf countries with country-specific formulas.

Law-Based Calculations

Formulas aligned with official labor laws of each Gulf country.

Instant Results

Get your gratuity estimate with detailed breakdown in seconds.

Frequently Asked Questions

Gratuity is a mandatory end-of-service benefit paid by employers to employees in GCC countries when they leave their job after completing a minimum period of service. It's calculated based on basic salary and years of service.
In UAE, gratuity is calculated as: 21 days of basic salary for each year of the first 5 years, and 30 days for each year beyond 5 years. Daily wage = Basic Salary ÷ 30. Maximum cap is 2 years of total basic salary.
Gratuity is generally tax-free in Gulf countries as there is no personal income tax. However, always consult with a tax advisor for your specific situation.
In UAE, gratuity is payable in both cases, but the amount may differ. For resignation before 5 years, you get 1/3 if service is 1-3 years, 2/3 if 3-5 years, and full gratuity after 5 years.