Understanding End of Service Gratuity
End of service gratuity (also known as end of service benefit or ESB) is a mandatory payment that employers in Qatar must provide to employees upon termination of their employment. It is one of the most important financial rights guaranteed to workers under Qatar Labor Law.
Legal Basis
According to Qatar Labor Law No. 14 of 2004, Article 54, employees who have completed at least one year of continuous service are entitled to end of service gratuity. This applies regardless of whether the employee resigns or is terminated by the employer.
Calculation Formula
The calculation is based on the employee's basic salary (excluding allowances):
- 3 weeks' basic salary for each completed year of service
- Pro-rated for partial years (months and days are calculated proportionally)
Step-by-Step Calculation
- Determine the employee's basic monthly salary (excluding housing, transport, and other allowances)
- Calculate the weekly salary: Monthly Salary ÷ 4
- Calculate the annual entitlement: Weekly Salary × 3
- Multiply by the number of years of service
Practical Examples
Example 1: 5 Years of Service
Employee details:
- Basic Monthly Salary: QAR 10,000
- Years of Service: 5 years
Calculation:
- Weekly Salary: 10,000 ÷ 4 = QAR 2,500
- 3 Weeks per Year: 2,500 × 3 = QAR 7,500
- Total Gratuity: 7,500 × 5 = QAR 37,500
Example 2: 3.5 Years of Service
Employee details:
- Basic Monthly Salary: QAR 8,000
- Years of Service: 3 years and 6 months
Calculation:
- Weekly Salary: 8,000 ÷ 4 = QAR 2,000
- 3 Weeks per Year: 2,000 × 3 = QAR 6,000
- Total Gratuity: 6,000 × 3.5 = QAR 21,000
Example 3: High-Salary Employee
Employee details:
- Basic Monthly Salary: QAR 25,000
- Years of Service: 10 years
Calculation:
- Weekly Salary: 25,000 ÷ 4 = QAR 6,250
- 3 Weeks per Year: 6,250 × 3 = QAR 18,750
- Total Gratuity: 18,750 × 10 = QAR 187,500
Important Notes
- Only basic salary is used for calculation — allowances like housing, transport, and food are excluded
- Gratuity is payable regardless of whether the employee resigns or is terminated
- There is no maximum cap on the gratuity amount under Qatar law
- The employer must pay gratuity within 7 days of the end of the employment contract
- Employees who have served less than 1 year are not entitled to gratuity
- If an employee is terminated for misconduct under Article 61, they may forfeit their gratuity
Use Our Calculator
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