End-of-Service Benefits Guide
Everything you need to know about end-of-service benefits and your legal rights
International Labour Organization statistics indicate that more than 35% of private sector employees in the Arab region do not know how to correctly calculate their end-of-service benefit, causing some to lose thousands in unclaimed entitlements. In this comprehensive guide, you will find everything you need — with numbers and examples — to claim your full legal right, whether in Egypt, Saudi Arabia, or the UAE.
End-of-Service Benefit: A Legal Right Not to Be Waived
An end-of-service benefit is not a favor from an employer — it is a legal right guaranteed under labor laws across the region. An employee who spent 10 years on a $2,000/month salary is entitled to no less than $15,000 — do you know exactly what you're owed?
Calculation Method by Country
| Country | First 5 Years | After 5 Years | Notes |
|---|---|---|---|
| Egypt | Half month/year | Full month/year | Based on last salary |
| Saudi Arabia | Half month/year | Full month/year | Includes housing & transport |
| UAE | 21 days/year | 30 days/year | Capped at 2 years |
| Kuwait | 1.5 months/year | 2 months/year | After 3 years of service |
When Are You Entitled?
- **Contract end:** Full entitlement regardless of service length
- **Resignation:** After 2 years in most countries (1 year in some)
- **Retirement:** Full entitlement with no conditions
- **Dismissal:** Full entitlement if dismissed without legal justification
What Is Included in the Salary for Calculation?
**Legal note:** In Saudi Arabia and UAE, housing, transportation, and food allowances are usually added to the base salary for benefit calculation. Always check your employment contract.
- Base salary (always included)
- Housing allowance (in most countries)
- Transportation allowance (per applicable law)
- Fixed regular allowances
Use the end-of-service calculator to compute your benefit accurately, accounting for all salary components.
Frequently Asked Questions
Is the benefit calculated on the base salary only or does it include allowances?+
It depends on your country's labor law and your employment contract. In Egypt it is calculated on total wages; in Saudi Arabia and the UAE it may include fixed allowances such as housing and transportation.
Am I entitled to the benefit if I resign voluntarily?+
Yes, in most Gulf and Arab countries you are entitled to the benefit upon resignation after completing two years of service. In some countries you may receive a portion of it after just one year.
What happens to the benefit if I am dismissed for disciplinary reasons?+
This varies by country. In Egypt, employees are entitled to the benefit even in dismissal cases, while in some Gulf countries the employee may be deprived of it entirely or partially if gross misconduct is proven.
How do I calculate the benefit if my salary changed multiple times?+
The legal standard in most countries is your last salary before termination of service. It is not calculated on an average of salaries over your years of work, but on your most recent salary.
Is there a maximum cap on end-of-service benefits?+
Yes, the UAE caps the benefit at the equivalent of two years' salary. Some other countries impose no cap, while certain employment contracts may set a higher ceiling than the law as additional benefits.