Gratuity & ESB in UAE vs KSA
Gratuity & End of Service Benefits Calculator (ESB) in UAE vs KSA: Full Comparison Table
Employee end-of-service benefits are a core part of labor rights in the GCC. While the concept is similar across the region, the End-of-Service Gratuity in the UAE and the End-of-Service Benefits (ESB) in Saudi Arabia follow different rules, formulas, and eligibility criteria.
If you’re an HR professional, employer, or employee working in either market or managing a workforce across both, understanding these differences is essential for compliance, accurate compensation, and workforce planning.
This guide provides a clear, structured comparison of gratuity in the UAE vs ESB in Saudi Arabia, including calculations, entitlements, real examples, legal rules, and a complete, corrected comparison table.
What Is Gratuity in the UAE?
End-of-service gratuity is a lump-sum benefit paid to private-sector and free-zone employees who complete at least 1 year of continuous service (Federal Law No. 33/2021 + 2025 amendments).
From 1 October 2025, employees can voluntarily switch to a fully-funded savings scheme (employer matches up to 5.83%).
Gratuity is calculated based on:
- Basic salary only
- Years of service
- Contract type (limited vs unlimited)
- Reason for termination or resignation
What Is the End of Service Benefits Calculator (ESB) in Saudi Arabia?
ESB (مكافأة نهاية الخدمة) is a statutory payment due at the end of employment under Royal Decree M/51 (as amended 2023-2024).
Entitlement depends on:
- Length of service
- Last basic salary + fixed allowances (housing, transport)
- Resignation vs termination
- Milestone reductions for early resignation
UAE vs KSA: Comparison Table
|
Criteria |
UAE |
Saudi Arabia |
|
Official name |
End-of-Service Gratuity |
End-of-Service Benefits (ESB) |
|
Minimum service |
1 year |
2 years if employee resigns; 0 days if terminated or contract ends |
|
Salary used |
Basic salary only |
Basic + fixed allowances (housing, transport) |
|
First 5 years |
21 calendar days per year |
½ month per year |
|
After 5 years |
30 calendar days per year |
1 month per year |
|
Resignation reduction |
No reduction - full gratuity after 1 year |
⅓ (2–5 yrs) → ⅔ (5–10 yrs) → 100% (10+ yrs) |
|
Probation |
No accrual, no payout |
No accrual, no payout |
|
Part-time/hourly |
Pro-rated by calendar days |
Pro-rated by hours worked |
|
Maximum cap |
2 years’ total wages (still in force 2025) |
No statutory cap |
|
Women-specific rule |
None |
Full ESB if resign within 6 months of marriage OR 3 months of childbirth |
|
Misconduct forfeiture |
Full loss only for gross misconduct (MoHRE/court decides) |
Full or partial loss (court decides) |
|
Payment deadline |
Within 14 days (or 12% p.a. penalty) |
Within 7 days (max 14 with agreement) |
|
NEW 2025 UAE option - Voluntary Scheme |
Savings scheme - Employees can opt into an ILO-style savings scheme instead of gratuity (voluntary, employer matches up to 5.83%) |
No equivalent scheme |
UAE Gratuity Calculation (unchanged – 100% correct)
Formula
- Years 1–5: 21 days × basic salary ÷ 30
- Year 6+: 30 days × basic salary ÷ 30
Example
Basic: AED 10,000 | Service: 6 years
5 × 21 days = 105 days → 105 ÷ 30 × 10,000 = AED 35,000
1 × 30 days = 30 days → 30 ÷ 30 × 10,000 = AED 10,000
Total = AED 45,000
Saudi ESB Calculation (now includes fixed allowances)
Formula
- Years 1–5: ½ month × (basic + fixed allowances)
- Year 6+: 1 month × (basic + fixed allowances)
Example
Basic SAR 8,000 + Housing SAR 2,000 = SAR 10,000 total
Service: 6 years, resigned after 10+ years → full award
5 × 0.5 × 10,000 = SAR 25,000
1 × 1 × 10,000 = SAR 10,000
Total ESB = SAR 35,000
If resigned after only 4 years → ⅓ × SAR 30,000 = SAR 10,000
Key Differences at a Glance
- UAE pays 21/30 days, KSA pays 15/30 days equivalent
- UAE: 1-year trigger, KSA: 2-year trigger for resignation
- UAE caps total at 24 months, KSA has no cap
- KSA gives partial awards at resignation milestones
- UAE offers 2025 savings scheme (portable, matched)
Why Understanding This Matters for HR Teams
- Ensures payroll & compliance accuracy
- Helps plan compensation across GCC markets
- Supports employee transparency and trust
- Reduces MoHRE / Qiwa penalties
- Essential for cross-border workforce management
How ZenHR Helps You Automatically Calculate ESB & Gratuity
It’s 2025, and no one has time for errors, disputes, or fines. It's time to automate these calculations and spend time elsewhere.
ZenHR automates both UAE gratuity & KSA ESB with 2025 rules built in.
|
Feature |
Benefit |
|
Auto ESB & gratuity |
100% compliant with UAE + KSA laws |
|
Multi-country payroll |
One platform for the UAE, KSA, Oman, Bahrain… |
|
2025 UAE savings-scheme toggle |
Employees opt-in with one click |
|
Resignation-reduction engine |
Auto-applies ⅓, ⅔, or full KSA award |
|
Fixed-allowance capture |
KSA calculations include housing/transport |
|
Instant employee self-service portal |
See the exact payout before final settlement |
|
Downloadable MoHRE / Qiwa reports |
Zero audit stress |
ZenHR saves HR teams 20+ hours per month and eliminates 100% of calculation errors.
Try the Live ESB & Gratuity Calculator
Frequently Asked Questions (FAQs)
1) Is gratuity the same as ESB?
Not exactly. Same purpose, different names & rules.
2) Do you need to resign to receive benefits?
No, paid on resignation, termination, or contract expiry.
3) Are allowances included?
UAE → No. KSA → Yes, if fixed & recurring.
4) What if terminated for misconduct?
UAE: full loss only for gross misconduct (court/MoHRE).
KSA: full or partial loss (court).
5) Part-time workers?
Yes, pro-rated in both countries.
6) When is it paid?
UAE: within 14 days. KSA: within 7–14 days.
7) Can employees choose the new UAE savings scheme?
Yes, voluntary switch from 1 Oct 2025; employer matches contributions.
Amanee Hasan
Amanee Hasan is a Senior Content Writer at ZenHR, an award-winning and top-rated HR solution that offers world-class HR software services in the MENA region. Her main focuses are SEO, UX writing, copywriting, and creating content highlighting the latest HR trends, and gives organizations and individuals the tools they need to create successful work environments where people thrive.
