--- title: "Gratuity & ESB in UAE vs KSA: Full Comparison" description: Compare gratuity and end-of-service benefits in the UAE vs KSA, including formulas, entitlements, and key differences for employees and employers. image: https://blog.zenhr.com/hubfs/Gratuity-and-ESB-in-UAE-vs-KSA.png --- [![ZenHR Logo](https://cdn.prod.website-files.com/6512cbc4fa8d0ecb482a233b/692c23776fa13080da88bb57_logo-dark.svg) ![ZenHR Logo](https://cdn.prod.website-files.com/6512cbc4fa8d0ecb482a233b/692c23776fa13080da88bb57_logo-dark.svg) ZenHR Logo](https://www.zenhr.com/en) Menu button - ZenHR Software [All Modules](https://www.zenhr.com/en/modules) [Payroll](https://www.zenhr.com/en/modules/payroll) [Time Management](https://www.zenhr.com/en/modules/attendance-and-time-tracking) [Employee and Manager Self-Service (ESS & MSS)](https://www.zenhr.com/en/modules/employee-self-service) [Employee Management](https://www.zenhr.com/en/modules/employee-management) [Performance Evaluation](https://www.zenhr.com/en/modules/performance-and-evaluation) [Reporting & Analytics](https://www.zenhr.com/en/modules/reporting-and-analytics) [ZenATS Applicant Tracking System (ATS)](https://www.zenhr.com/en/modules/applicant-tracking-system) [Earned Wage Access (ZenEWA)](https://www.zenhr.com/en/earned-wage-access-zenewa) [Mobile App](https://www.zenhr.com/en/mobile) [HR Software for Construction Companies](https://www.zenhr.com/en/construction-industry) [HR Software for IT Companies](https://www.zenhr.com/en/it-industry) [HR Software for F&B Companies](https://www.zenhr.com/en/food-and-beverage-industry) [HR Software for Retail Companies](https://www.zenhr.com/en/retail-industry) [HR Software for Real Estate Companies](https://www.zenhr.com/en/real-estate-industry) [HR Software for Enterprise Companies](https://www.zenhr.com/en/enterprise-hr-software) - 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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. [End of Service Benefits Calculator](https://www.zenhr.com/en/service-termination-benefits-calculator) 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 [UAE Gratuity Calculator](https://www.zenhr.com/en/uae-gratuity-calculator?utm_source=blog-Top-KSA-Software)   ## **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**](https://www.zenhr.com/en/service-termination-benefits-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](https://blog.zenhr.com/hubfs/Author%20image.jpg) ###### 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. 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