GCC
Leave Benefits
End of Service Gratuity: Calculation Guide for UAE & KSA
January 10, 2026
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Massar Legal Team
Summary
A clear comparison of how to calculate End of Service Benefits (EOSB) under the new UAE laws versus Saudi Labor Law.
Key Points
- UAE: 21 days for first 5 years, 30 days thereafter
- Impact of unpaid leave on gratuity
- KSA: Calculation based on 'Last Drawn Salary'
- Introduction of Savings Schemes as alternatives
Full Details
End of Service Gratuity (EOSB) is a critical component of employee compensation in the Gulf. Recent changes, particularly in the UAE, have standardized potential payouts, moving away from 'limited' vs 'unlimited' contract distinctions.
The Savings Scheme Alternative
A major trend is the shift towards defined contribution savings schemes, similar to 401(k) plans. The UAE has introduced optional schemes where employers contribute monthly to an investment fund instead of a lump sum upon termination. This protects employee benefits and improves cash flow management for businesses.
Source:
Massar Legal Team