Employment rules · 9 min read · Updated October 2026
Accruing end of service: holding the liability month by month across the Gulf
How end of service builds up each month in the six Gulf countries, why the amount built up differs from the amount owed on a given day, how a raise reprices every year served, and what finance needs from payroll to post it.
How does end of service build up month by month in the Gulf?
Each month, the figure built up is what the rule would pay for the service so far, on the current pay, if you ended the contract that day. So the month's movement is not a fixed slice. It rises when service passes a tier step, and stops growing with service at the UAE's and Kuwait's caps. A raise reprices every year already served, because the rule uses the last pay. What is owed on a given day can be less.
Know which years your own figure covers
End of service builds up across the Gulf, but not always as a sum you owe yourself. The guide to end of service in the Gulf and Egypt sets out who builds it up and who pays it at the end.
Where a fund pays, your own figure covers only the years before it. In Bahrain, that is an expatriate's service before 1 March 2024. Those years no longer grow in number. Their value still moves with every raise, since the Labour Law works them out on the last pay.
In Oman, an expatriate's gratuity grows until the savings scheme starts, by 19 July 2027 at the latest. In the DIFC, and for an employer in MOHRE's Savings Scheme, the years before the scheme stay with you until they are settled. The guide to end of service paid monthly sets out each scheme.
Everywhere else in the Gulf, every year of service builds your own figure.
See what moves the figure from one month to the next
Each month, the figure is worked again from the start: the service so far, on the current pay, under the country's rule. The difference from last month is the month's movement. Most months, it is a twelfth of a year's rate. Five things change it.
| What happens | Where | What it does to the figure |
|---|---|---|
| Service passes the tier step | Saudi Arabia, the UAE and Kuwait, after five years | Each month adds more from then on. In Saudi Arabia, twice as much: a month's wage a year instead of half a month's. In the UAE, 30 days' basic pay a year instead of 21. In Kuwait, a month's pay a year instead of 15 days' |
| Service reaches the cap | The UAE, at two years' pay. Kuwait, at a year and a half's pay, after about twenty years, on a five-day or a six-day week | Service adds nothing more. A raise still does, because the cap is itself counted in pay |
| The first year is completed | The UAE and Qatar | Nothing is owed before a year's service is complete. Once it is, the whole year counts |
| Pay rises | Every Gulf country | Every year already served is worked again on the new pay |
| Pay moves into or out of basic pay | The UAE, Qatar, Bahrain and Oman, where the rule uses basic pay | The same, up or down |
Qatar and Oman have no step. Each year earns the same, at least three weeks' basic pay in Qatar and at least a month's in Oman.
Follow one employee across a step and a raise
Take one employee in Saudi Arabia on a full wage of SAR 12,000 a month, at four month-ends. They reach five years' service at the second. At the fourth, their wage rises to SAR 13,200.
| Month-end | Service | Full wage | Built up | The month's movement | Owed had they resigned that day |
|---|---|---|---|---|---|
| Before the step | Four years and eleven months | SAR 12,000 | SAR 29,500 | SAR 500 | SAR 9,833.33 |
| At the step | Five years | SAR 12,000 | SAR 30,000 | SAR 500 | SAR 10,000 |
| After the step | Five years and a month | SAR 12,000 | SAR 31,000 | SAR 1,000 | SAR 20,666.67 |
| After a raise | Five years and two months | SAR 13,200 | SAR 35,200 | SAR 4,200 | SAR 23,466.67 |
Three things move the figure here, and only one of them is time.
In the month they reach five years, the movement is still SAR 500. From the next month, each month adds SAR 1,000, because each year now earns a month's wage rather than half a month's.
The raise month adds SAR 4,200. Of that, SAR 1,100 is the month's own service on the new wage. The other SAR 3,100 is the raise reaching back over the five years and a month already served.
A figure built by adding SAR 1,000 each month would have missed that SAR 3,100, and every catch-up after it.
Know why the amount owed on a given day can be smaller
The figure built up is what the rule would pay if you ended the contract on notice that day. What is owed depends on how employment actually ends.
| If, at the month's end, the employee | What is owed against the figure built up |
|---|---|
| Is let go by you on notice | All of it, once any minimum service is complete |
| Resigns, in Saudi Arabia or Kuwait | A share that rises with service. In Kuwait, on an open-ended contract |
| Resigns, in the UAE, Qatar, Bahrain or Oman | All of it |
| Leaves within the first year, in the UAE or Qatar | Nothing |
| Is dismissed for a cause the law lists | Nothing, in Saudi Arabia, Qatar and Oman. In Kuwait, nothing for three of those causes |
The two figures can part sharply. In Saudi Arabia, a resignation after exactly five years still earns a third. The share rises to two thirds only once service passes five years.
In the example above, the figure built up moved by SAR 1,000 in the month after the employee reached five years. In the same month, what a resignation would have paid rose from SAR 10,000 to SAR 20,666.67.
Saudi Arabia's scale steps at two, five and ten years. Kuwait's steps at three, five and ten. At each step, the amount owed on resignation jumps far more than the figure built up moves.
How either figure is measured and presented in your accounts is for your accounting policy and your auditors. Both come from the same facts: the start date, the pay and the rule.
Count the pay and the service the rule counts
Each country's rule names the pay it is worked on, as the guide to end of service sets out. What goes wrong is usually a change to that pay, or to the service, that never reached the figure.
| What changes | What it does to the figure |
|---|---|
| A housing or transport allowance | In Saudi Arabia, end of service is worked on the full wage, transport included. In Kuwait, on the last wage, with the allowances paid regularly. In both, the figure moves with the allowance. In the UAE, Qatar, Bahrain and Oman, it does not |
| A restructure that moves pay into basic pay | In the UAE, Qatar, Bahrain and Oman, every year already served is worked again on the higher basic pay. In Bahrain, any social allowance counts too |
| Commission or other variable pay | In Saudi Arabia, it can be left out where both sides have agreed to that |
| Unpaid absence | In the UAE, days of unpaid absence do not count as service |
| A move to your entity in another Gulf country | The first entity's figure is settled under its own law, as the guide to end of service in the Gulf and Egypt sets out. The second entity's figure starts from nothing, unless the new contract counts the earlier years |
Moving pay out of basic pay lowers what the employee builds up from then on. It also lowers the figure for every year already served, where the rule uses basic pay.
Know what a figure held too low costs
A figure held too low does not stay hidden. It surfaces in the month someone leaves, as cash, by a deadline that does not wait for the records. The guide to what a payroll error costs sets out each country's deadline for final pay.
Three habits leave the figure low. Adding the same slice each month misses every raise, so the gap grows with each pay review. Missing the step undercounts every month after it. Working the figure on the wrong pay, the full wage where the rule uses basic pay or the reverse, misstates every year at once.
In Bahrain, for service since March 2024, the cost arrives sooner. An end of service contribution paid late, or on less than the real wage, carries the Social Insurance Law's interest and additional charge. The guide to end of service paid monthly sets them out.
Give finance what it needs to post the month
To post end of service, finance needs more than one total. It needs to see why the total moved.
| From payroll, each month | Why finance needs it |
|---|---|
| Each employee's figure at the month's end, by entity and currency | It is the balance, person by person, and it adds up to the total |
| The month's movement, split into the service earned and any repricing | A raise month otherwise looks like an error |
| What was paid to each leaver, against what was built up for them | The difference after a resignation or a dismissal has to be explained |
| The start date, the pay and the service behind each figure | So any one figure can be rebuilt |
| Where a fund pays, the month's payment into it, apart from the figure for the years before it | One is paid every month. The other is owed until it is settled |
Hold every figure from the approved runs
A figure kept in a spreadsheet beside payroll falls behind the first time pay changes in one and not the other.
On our payroll, we calculate what each employee has built up every month. Each figure is worked from the employee's start date, on the pay in that month's approved run.
End of service liability comes from the approved runs, person by person, for every country at once. You see the total and how many employees accrue it, with each employee's years of service and the total built up.
In Saudi Arabia, Qatar and Kuwait, an end of service schedule comes with the month's files, showing what each employee has built up. In the UAE, it shows what each expatriate has built up.
Our engines absorb a rule change before your next run. You are told what changed and what it does to your figures. The full calculation history behind each figure stays open to you. Your entity pays end of service, or the fund does where one pays it.
Common questions.
Why does end of service jump in the month of a raise?
Is the figure built up what we would pay if someone left today?
Does a monthly scheme end the liability?
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