End of service gratuity (also called severance pay or terminal benefits) is a lump-sum payment made by employers to employees upon termination of employment. Eligibility varies by country: India requires 5 years minimum service, UAE requires 1 year (but resignation benefits only after 5 years), Saudi Arabia requires 2 years, and some countries like USA have no statutory requirement. It's designed to recognize employee loyalty and provide financial security during career transitions.

It depends on the country. In India and Qatar, you receive full gratuity on resignation after completing minimum service. In UAE, resignation before 5 years means NO gratuity; after 5 years you get full benefits. In Saudi Arabia, resignation gives reduced benefits: 1/3 for 2-5 years, 2/3 for 5-10 years, full after 10 years. In China, resignation provides zero compensation. The UK only provides statutory redundancy for employer-initiated terminations.

Most countries use "basic salary" only, excluding allowances. India includes Basic + Dearness Allowance. UAE, Saudi Arabia, and Qatar use basic salary only (excluding housing, transport, and other allowances). Kuwait is an exception — it includes the full salary with allowances. China uses the average monthly salary over the last 12 months. Understanding this distinction is crucial as it significantly affects your final benefit amount.

Tax treatment varies significantly. Gulf countries (UAE, Saudi, Qatar, Kuwait) have no income tax, so gratuity is completely tax-free. India exempts gratuity up to ₹20 lakhs. UK exempts the first £30,000 of genuine redundancy payments. USA taxes severance as ordinary income. Japan has preferential tax rates for retirement income. If you're repatriating funds, check tax treaties between countries to avoid double taxation.

Payment timelines vary by country. India mandates payment within 30 days of last working day, with penalty interest for delays. UAE typically pays within 14 days of final settlement and visa cancellation. Saudi Arabia usually pays within 2 weeks. China requires payment within 15 days of termination. If your employer delays payment, you have legal recourse through labor departments, courts, or arbitration in most countries.

Employers can only legally refuse gratuity in specific circumstances: termination for serious misconduct (theft, violence, fraud), resignation before minimum qualifying period, or absconding. Financial problems, poor performance, or disputes about the amount are not valid reasons. If wrongfully denied, you can file complaints with labor authorities (Ministry of Human Resources in UAE, Labor Commissioner in India, Labor Office in Saudi) or pursue legal action.

In most countries, employee gratuity is a protected priority debt in bankruptcy proceedings. India treats gratuity as a preferential claim that must be paid before other creditors. UAE and Saudi labor laws prioritize employee dues in liquidation. The UK's National Insurance Fund pays statutory redundancy if employers become insolvent. File your claim immediately with the bankruptcy administrator and register with labor authorities.

This calculator uses official formulas from each country's labor laws and is updated for 2026 regulations. However, results are estimates because actual amounts may vary based on company-specific policies, special contract clauses, free zone regulations (like DIFC in UAE), collective bargaining agreements, or recent legal amendments. Always verify your calculation with your HR department or a legal professional before making career decisions based on expected benefits.