End-of-service pay in Saudi Arabia and the UAE: the differences, with worked examples

2 November 2026

1. Which wage is used?

In Saudi Arabia it is the last actual wage: basic pay plus fixed allowances such as housing and transport. In the UAE it is the last basic salary only, without allowances. Two employees on the same total pay can therefore receive very different amounts.

2. How much per year?

• Saudi Arabia: half a month’s wage for each of the first five years, then a full month for each year after.
• UAE: 21 days’ wage for each of the first five years, then 30 days for each year after, capped at two years’ pay, and nothing before one full year.
• In both, part-years count pro rata.

3. What if the employee resigns?

This is the biggest difference. In Saudi Arabia resignation reduces the benefit: nothing under two years, one third from two to under five, two thirds from five to under ten, and the full amount after ten. In the UAE the new law does not reduce gratuity for resignation, provided one year is complete.

A worked example

An employee leaves by resignation after 7 years. In Saudi Arabia on an actual wage of SAR 8,000: (5 × 4,000) + (2 × 8,000) = SAR 36,000 in full, of which two thirds = SAR 24,000 is payable. In the UAE on a basic salary of AED 8,000: the daily wage is 266.67, so gratuity is (5 × 21 + 2 × 30) × 266.67 ≈ AED 44,000, in full despite the resignation.

Try your own figures: Saudi calculator

UAE calculator

This article is for guidance, not legal advice; for disputes or special contracts, consult a specialist or the official authority in your country.