End of Service Calculator Gratuity & severance across the Gulf
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Guide · terminology

Gratuity vs End of Service vs Severance vs Indemnity

Four words for broadly the same thing — the money your employer owes you when your job ends. Here is what each means, and which one applies where.

If you work in the Gulf, you have probably seen your end-of-employment payout called several different things. Gratuity, end of service, indemnity and severance all describe a lump sum paid when a contract ends — but the word that applies to you depends on your country, and in one case on whether the payment is set by law at all.

The three Gulf terms — gratuity, end of service and indemnity — are statutory: the amount is fixed by the labour law and your employer must pay it. Severance, the term most common in the United States, is usually contractual rather than statutory, which means it depends on your agreement rather than a national formula. That single distinction is the most important one to understand.

Below is how the words map to countries, followed by a calculator link for each so you can get your own figure.

Term
What it means
Statutory?
End of service
Gulf umbrella term — Saudi Arabia, Qatar, Egypt
Yes
Gratuity
UAE, Oman, Pakistan — days of pay per year
Yes
Indemnity
Kuwait, Bahrain (\u201cleaving indemnity\u201d)
Yes
Severance
US / Western term for pay on dismissal
Usually no

End of service — the Gulf umbrella term

In Saudi Arabia and Qatar, the statutory payment is called the end-of-service award or benefit. It is calculated from your wage and your length of service, and it is owed whether you are terminated or resign — though resignation can reduce it. You can calculate your Saudi end-of-service award or use the Qatar end-of-service tool to see your figure.

Gratuity — the UAE and beyond

In the UAE, Oman and Pakistan the same benefit is called gratuity, usually expressed in days of basic pay per year of service. The UAE\u2019s 2021 law sets 21 days a year for the first five years and 30 days thereafter, capped at two years\u2019 pay. Run the numbers with the UAE gratuity calculator.

Indemnity — Kuwait and Bahrain

Kuwait and Bahrain use the word indemnity (Bahrain: \u201cleaving indemnity\u201d). The structure is similar — a number of days per year that steps up with longer service — and Kuwait applies a resignation scale. Check yours with the Kuwait indemnity calculator.

Severance — contractual, not statutory

Severance is the term used mostly in the United States and other Western markets. Crucially, there is no federal statutory formula — severance is whatever your contract, company policy or a negotiated agreement provides. That is why a calculator can give you a Gulf gratuity or indemnity figure with confidence, but severance always comes down to your individual agreement.

Get your own number

Whichever term applies to you, the calculator does the maths. Pick your country:

Saudi Arabia → UAE → Qatar → Kuwait →
Home› End of Service Calculator› Terminology
Guide · terminology

Gratuity vs End of Service vs Severance vs Indemnity

Four words for broadly the same thing — the money your employer owes you when your job ends. Here is what each means, and which one applies where.

If you work in the Gulf, you have probably seen your end-of-employment payout called several different things. Gratuity, end of service, indemnity and severance all describe a lump sum paid when a contract ends — but the word that applies to you depends on your country, and in one case on whether the payment is set by law at all.

The three Gulf terms — gratuity, end of service and indemnity — are statutory: the amount is fixed by the labour law and your employer must pay it. Severance, the term most common in the United States, is usually contractual rather than statutory, which means it depends on your agreement rather than a national formula. That single distinction is the most important one to understand.

Below is how the words map to countries, followed by a calculator link for each so you can get your own figure.

Term
What it means
Statutory?
End of service
Gulf umbrella term — Saudi Arabia, Qatar, Egypt
Yes
Gratuity
UAE, Oman, Pakistan — days of pay per year
Yes
Indemnity
Kuwait, Bahrain (\u201cleaving indemnity\u201d)
Yes
Severance
US / Western term for pay on dismissal
Usually no

End of service — the Gulf umbrella term

In Saudi Arabia and Qatar, the statutory payment is called the end-of-service award or benefit. It is calculated from your wage and your length of service, and it is owed whether you are terminated or resign — though resignation can reduce it. You can calculate your Saudi end-of-service award or use the Qatar end-of-service tool to see your figure.

Gratuity — the UAE and beyond

In the UAE, Oman and Pakistan the same benefit is called gratuity, usually expressed in days of basic pay per year of service. The UAE\u2019s 2021 law sets 21 days a year for the first five years and 30 days thereafter, capped at two years\u2019 pay. Run the numbers with the UAE gratuity calculator.

Indemnity — Kuwait and Bahrain

Kuwait and Bahrain use the word indemnity (Bahrain: \u201cleaving indemnity\u201d). The structure is similar — a number of days per year that steps up with longer service — and Kuwait applies a resignation scale. Check yours with the Kuwait indemnity calculator.

Severance — contractual, not statutory

Severance is the term used mostly in the United States and other Western markets. Crucially, there is no federal statutory formula — severance is whatever your contract, company policy or a negotiated agreement provides. That is why a calculator can give you a Gulf gratuity or indemnity figure with confidence, but severance always comes down to your individual agreement.

Get your own number

Whichever term applies to you, the calculator does the maths. Pick your country:

Saudi Arabia → UAE → Qatar → Kuwait →