Indemnity, Notice Period, Termination Indemnity and Transfers in the GCC – Complete Guide 2026

Table of Contents

Working in the Gulf comes with many employment rules that every expatriate worker should understand before resigning, changing jobs, transferring to another company or leaving the country.

One of the most common questions among employees in Kuwait, UAE, Saudi Arabia, Qatar, Bahrain and Oman is:

What happens to my salary, end-of-service indemnity, notice period and other employment benefits when I resign, get terminated or transfer to another employer?

The answer depends on the country, type of employment contract, length of service, salary structure and reason for termination.

This guide explains the major rules around GCC indemnity, notice periods, termination, end-of-service benefits and employer transfers in simple language, with examples and practical calculations.

Important: Labour laws differ between GCC countries and may also differ depending on the worker’s employment category and contract. Always check the latest official government rules before making an important employment decision.

What Is Employment Indemnity in the GCC?

Click here for Gulf Gratuity & Indemnity Calculators 2026 – UAE, Kuwait, Qatar, Saudi, Oman & Bahrain

Click here for Oman Gratuity Calculator 2026 – End of Service Benefit

Click here for Bahrain Indemnity Calculator 2026 – End of Service Gratuity

Click here for Qatar Gratuity Calculator 2026 – End of Service Benefit

Click here for UAE Gratuity Calculator 2026 – End of Service Benefit Best Calculator

Click here for Saudi End of Service Calculator 2026 – Best Gratuity Calculation

Click here for Kuwait Indemnity Calculator 2026 – End of Service Benefit

Employment indemnity is generally a payment or end-of-service benefit that becomes due to an eligible worker when the employment relationship ends.

It may be called:

End-of-service indemnity
End-of-service gratuity
Gratuity
Terminal service benefit
End-of-service award
Service benefit

The calculation is not identical across the GCC.

For example:

Kuwait has its own terminal service indemnity system.
UAE private-sector expatriate workers generally receive end-of-service benefits based on basic wage and completed service.
Saudi Arabia calculates end-of-service award using a half-month salary for each of the first five years and a full month for subsequent years, subject to the rules for resignation and other termination situations.
Qatar generally provides at least three weeks of basic wage for each year of service for eligible workers.
Oman has specific end-of-service provisions, including transitional rules connected with the country’s social protection system.
Bahrain has its own labour-law rules and social-insurance arrangements.

Because the formulas are different, employees should not use a calculator designed for one GCC country to estimate another country’s benefit. You can use the Gulf Gratuity & Indemnity Calculators available on IndianInQ8 to start checking your estimated entitlement.

GCC Indemnity and Notice Period at a Glance

Country	Important Notice Rule	End-of-Service / Indemnity Principle	Transfer / Job Change
Kuwait	Generally 3 months for monthly-paid workers under an indefinite contract; 1 month for other workers	Governed mainly by Private Sector Labour Law	Transfer and work-permit procedures depend on current rules and worker status
UAE	Notice period generally agreed in the contract, subject to the statutory range	Foreign full-time worker generally receives 21 days per year for first 5 years and 30 days thereafter, based on basic wage	Job changes are regulated through the UAE labour and work-permit system
Saudi Arabia	For indefinite monthly-paid contracts, generally 30 days when employee terminates and 60 days when employer terminates	Half-month wage for each of first 5 years and one month for each subsequent year	Employment contracts generally continue when establishment ownership changes; transfer rules are regulated
Qatar	Notice is generally 1 month during the first 2 years and 2 months after 2 years	At least 3 weeks of basic wage for each year for eligible workers	Employer-change requests are processed through Ministry of Labour procedures
Bahrain	Generally 30 days’ notice	End-of-service and social-insurance rules depend on worker category and applicable legislation	Employer/work-permit transfer procedures apply
Oman	Generally 30 days for monthly-paid workers and 15 days for others in indefinite contracts, unless a longer period is agreed	Labour law provides end-of-service benefits for workers not covered by the relevant social-protection provisions, subject to the current law	Certain transfers require agreement and/or Ministry procedures

This table is a starting point only. The exact entitlement can depend on contract type, nationality/status, employment category, reason for leaving and amendments to the law.

1. Kuwait Indemnity and Notice Period

Kuwait’s Private Sector Labour Law No. 6 of 2010 contains specific rules covering termination, notice and terminal service indemnity.

Kuwait Notice Period

For an indefinite-term employment contract, Article 44 generally provides:

3 months’ notice for workers receiving monthly remuneration.
1 month’s notice for other workers.
If the required notice is not observed, compensation may be payable for the notice period.
When the employer gives the notice, the worker has rights during the notice period to look for another job.

For a monthly-paid employee, the three-month notice requirement is particularly important when planning a resignation.

Example

Suppose:

Monthly wage = KWD 600
Required notice = 3 months
Employee serves only 1 month

The unserved portion is approximately two months. The notice compensation can therefore become a significant amount, depending on the applicable wage and circumstances. This is separate from the employee’s end-of-service indemnity.

Kuwait Indemnity

Kuwait’s terminal service indemnity rules are separate from notice compensation. That means an employee leaving a job may have several different components in the final settlement:

Salary up to the last working day
Notice-period salary or compensation, where applicable
End-of-service indemnity
Unused annual leave entitlement, where applicable
Other contractual or statutory amounts
Lawful deductions, if applicable

Kuwait Example

Consider an employee who has worked for a company for several years and decides to resign. The employee should not simply calculate:

Final settlement = indemnity

The actual settlement may involve:

Final Settlement = Salary + Leave Entitlement + Indemnity + Other Dues ± Notice Adjustment ± Lawful Deductions

The exact calculation depends on the employee’s circumstances. For a detailed Kuwait calculation, use the:

Kuwait Indemnity Calculator

2. UAE Indemnity and Notice Period

The UAE private-sector employment system is governed primarily by Federal Decree-Law No. 33 of 2021 and its amendments and implementing regulations.

UAE Notice Period

The UAE system generally requires the employment contract to specify the notice period, subject to the statutory framework.

The notice period is generally required to be:

Not less than 30 days and not more than 90 days.

The exact period should therefore be checked against the employment contract and applicable UAE labour regulations.

If the employee or employer does not observe the required notice period, compensation may be payable for the unserved portion.

UAE End-of-Service Gratuity

For an eligible foreign full-time employee who has completed at least one year of continuous service, the general calculation is based on the employee’s last basic wage, not the total salary.

The general structure is:

First 5 years – 21 days of basic wage for each year

After 5 years – 30 days of basic wage for each additional year

The law also provides for proportional entitlement for fractions of a year after the qualifying service requirement.

UAE Example – Suppose an employee has:

Basic salary = AED 5,000
Service = 4 years

A simplified calculation is:

Daily basic wage = AED 5,000 ÷ 30

Approximately:

AED 166.67 per day

21 days:

AED 166.67 × 21 = AED 3,500

For four years:

AED 3,500 × 4 = AED 14,000

So the approximate end-of-service gratuity would be:

AED 14,000

This is an illustration only. The employee’s actual legal entitlement depends on the employment circumstances and applicable law.

You can calculate an estimated UAE gratuity using the:

UAE Gratuity Calculator

3. Saudi Arabia Indemnity and Notice Period

Saudi Arabia’s Labour Law contains detailed provisions covering termination, notice periods and end-of-service awards.

Saudi Notice Period – For an indefinite-term contract where salary is paid monthly:

If the employee terminates – The employee generally gives:

30 days’ written notice

If the employer terminates

The employer generally gives:

60 days’ written notice

If the required notice is not observed, compensation equal to the worker’s wage for the relevant notice period can become payable under Article 76.

Saudi End-of-Service Award

Under Article 84, the general calculation is:

First 5 years

Half a month’s wage for every year

After 5 years

One month’s wage for every additional year

The last wage is used as the basis, subject to the applicable law.

Saudi Example

Suppose:

Last wage = SAR 6,000
Service = 8 years

First 5 years:

5 × SAR 3,000 = SAR 15,000

Remaining 3 years:

3 × SAR 6,000 = SAR 18,000

Approximate total:

SAR 33,000

However, resignation can affect the amount payable. Saudi Labour Law Article 85 provides different proportions for resignation depending on length of continuous service.

Therefore, employees should not assume that every resignation produces the same award as employer termination.

4. Qatar Indemnity and Notice Period

Qatar’s Labour Law provides specific rules covering notice, end-of-service gratuity and changes involving employers.

Qatar Notice Period

Under the Labour Law, the notice period generally depends on the length of service.

A commonly applicable structure is:

One month during the first two years of service
Two months after two years of service

The employment contract and applicable law should always be checked before relying on a particular notice period.

Qatar End-of-Service Gratuity

Article 54 provides that an eligible worker who has completed at least one year of service is entitled to an end-of-service gratuity.

The gratuity must generally be:

At least three weeks of wage for each year of service

The calculation is based on the worker’s last basic wage.

Qatar Example

Suppose:

Basic wage = QAR 4,000
Service = 5 years

Weekly basic wage:

QAR 4,000 ÷ 4.333 ≈ QAR 923

Three weeks:

Approximately QAR 2,769 per year

For five years:

Approximately QAR 13,845

The actual calculation should use the legally applicable method and the worker’s precise service period.

5. Bahrain Indemnity and Notice Period

Bahrain’s Labour Law regulates employment termination and notice requirements.

Article 99 of Law No. 36 of 2012 generally provides a 30-day notice period for termination, with the employment contract remaining effective during the notice period.

If the required notice is not observed, compensation corresponding to the notice period or remaining portion can become payable.

The law also provides workers with time during an employer-issued notice period to search for another job while retaining their wage.

Bahrain’s end-of-service arrangements should be checked together with the applicable social-insurance legislation and the worker’s employment category.

This is important because the treatment of end-of-service benefits is not identical for every worker category.

6. Oman Indemnity and Notice Period

Oman’s Labour Law provides specific rules on termination and end-of-service benefits.

Oman Notice Period

For an indefinite-term contract, Article 38 generally provides:

30 days’ notice for monthly-paid workers
15 days’ notice for other workers

The contract may provide for a longer notice period.

If the notice requirement is not followed, compensation equivalent to the wage for the notice period or remaining portion may become payable.

Oman End-of-Service Benefit

Oman’s current labour framework includes provisions for end-of-service benefits for workers who are not covered by the relevant Social Protection Law arrangements.

The law provides, subject to its applicability:

At least one basic wage for each year of service

Fractions of a year are generally calculated proportionately.

Because Oman has introduced the Social Protection system and related savings arrangements, employees should check whether their employment falls under the applicable transition and social-protection provisions rather than relying on an old gratuity formula.

What Is the Difference Between Indemnity and Notice Pay?

This is one of the most important points for GCC employees.

Indemnity and notice pay are not normally the same thing.

Indemnity – Indemnity is generally connected with:

Length of service + applicable end-of-service rules

Notice pay – Notice pay is connected with:

The required notice period + salary/wage + days not served

Example – An employee in a country requiring a 60-day notice period resigns but serves only 30 days.

The employee may have:

End-of-service entitlement based on service
30 days of notice served
A possible financial adjustment for the 30 days not served
Unused leave entitlement
Final salary

Therefore:

Notice compensation does not automatically replace end-of-service indemnity.

They are separate employment issues.

What Happens When an Employee Resigns?

Resignation does not automatically mean that the employee loses all benefits.

The final entitlement depends on the country’s labour law and the circumstances of resignation.

The employee should normally check:

1. Contract type – Is it:

Unlimited/indefinite?
Fixed-term?
Full-time?
Part-time?
Another employment category?

2. Notice period – How much notice is legally and contractually required?

3. Length of service – How many years and months have been completed?

4. Reason for resignation – Some GCC laws provide different consequences when the employee resigns compared with employer termination.

5. Salary used for calculation – This is extremely important.

Some benefits are calculated using:

Basic wage

while others may use:

Full wage / remuneration

depending on the country and the particular entitlement.

What Happens When the Employer Terminates the Employee?

Termination can involve several separate rights.

Depending on the country and circumstances, the final settlement may include:

Salary until the final working date
Notice-period salary or compensation
End-of-service indemnity
Unused annual leave
Contractual benefits
Compensation for unlawful termination, where applicable
Repatriation or return-travel obligations in certain circumstances
Other amounts legally due

However, an employer may also have statutory grounds for termination without the normal notice or with different consequences.

For this reason, the reason recorded for termination is important.

Termination During the Notice Period

An employee may sometimes be told:

“You don’t need to come to work during your notice period.”

That does not necessarily mean the employee’s employment immediately ends.

In several GCC labour systems, the employer can release the employee from performing duties during some or all of the notice period while maintaining the employment relationship and associated pay/rights for the applicable period.

The exact treatment differs by country.

Always obtain the termination date in writing.

Can an Employee Change Employer Without Losing Indemnity?

This is one of the most common questions among expatriate workers.

The answer depends on what exactly is happening.

There are two very different situations:

Situation 1 – Transfer of employment – The employee moves from Employer A to Employer B through an approved labour-market/work-permit process.

Situation 2 – Termination followed by a new job – The employee’s existing employment relationship ends and the employee starts a completely new employment relationship.

These situations can have very different consequences for service continuity and end-of-service benefits.

Employer Transfer vs Job Change

Suppose an employee has worked for Company A for six years.

Company A is acquired by Company B.

If the applicable law treats the employment relationship as continuing, the employee’s service may remain continuous rather than being treated as a resignation.

Saudi Arabia, for example, expressly provides that when establishment ownership is transferred or the legal form changes through merger, division or similar arrangements, employment contracts remain in force and service is considered continuous. The law also addresses responsibility for rights arising before the transfer.

This is very different from an employee voluntarily resigning and joining an unrelated employer.

What Should You Check Before Accepting a Transfer?

Before accepting a transfer, ask for written confirmation of:

New employer name
New employment contract
Basic salary
Total salary
Job title
Work location
Working hours
Annual leave
Notice period
Probation terms
Service start date
Treatment of previous service
End-of-service benefit treatment
Outstanding leave balance
Outstanding salary
Work permit/residency status
Any deductions or liabilities

The most important question for indemnity purposes is:

Will my previous service date continue to be recognized?

Do not assume the answer.

Example: Transfer Between Companies

Imagine:

Employee joined Company A in 2018
Company A is transferred to Company B in 2026
Employee continues doing the same job
New company says the employee’s service starts again in 2026

The employee should not simply accept the new date without checking the applicable labour law and transfer documents.

If the law treats the transaction as a transfer of ownership with continuous employment, previous service may continue to be recognized.

The employee should retain:

Original contract
Salary records
Civil ID/work permit records
Previous employment certificate
Transfer documents
New contract
Any written confirmation regarding continuity of service

Kuwait Residency Affairs https://www.moi.gov.kw/main/eservices/residence?culture=en

Qatar Employer Change Example

Qatar has an electronic process through the Ministry of Labour for changing employers.

The Ministry’s employer-change service allows a worker to submit an application to change employment from one employer to another. The new employer submits the request and the existing employer is notified through the process.

The Ministry’s system also provides mechanisms relating to the notice period, including circumstances where waiver of the notice period is requested.

This means an employee should distinguish between:

Changing employer through the official process

and

simply leaving the current job without completing the required legal procedures.

Saudi Arabia Transfer and Continuity Example

Saudi labour rules specifically address what happens when an establishment changes ownership.

Where ownership is transferred or the legal form changes through merger, division or another similar process, employment contracts remain effective and service is considered continuous.

The law also states that the predecessor and successor can have joint responsibility for certain worker rights arising before the ownership transfer.

This is particularly important during:

Company acquisitions
Mergers
Restructuring
Business transfers
Establishment ownership changes

Employees should keep copies of old and new employment documents during such changes.

What About Moving From One Country to Another?

A transfer from:

Kuwait → UAE

or:

Saudi Arabia → Qatar

is normally not the same as an internal employer transfer within the same country’s labour system.

Each GCC country has its own:

Employment contract
Work permit
Residency system
Labour authority
End-of-service rules
Notice rules
Employer-change procedures

Therefore, if you leave a Kuwait employer and start a new job in the UAE, your Kuwait employment normally needs to be settled under Kuwait’s applicable rules before you rely on the UAE employment relationship.

Final Settlement Checklist for GCC Employees

Before signing a final settlement, check all of the following:

Salary

Last month’s salary
Unpaid overtime, if applicable
Allowances or other contractual amounts

Notice

Required notice period
Notice already served
Remaining notice
Payment or deduction relating to unserved notice

Indemnity

Total completed service
Basic salary/wage used
Applicable country formula
Resignation rules
Termination rules

Leave

Unused annual leave
Other accrued contractual entitlements

Documents

Request copies of:

Final settlement
Employment certificate
Cancellation/transfer documents where applicable
Work permit documentation
Payslips
Any release or clearance document

Common Mistakes Employees Make

Mistake 1: Assuming the GCC has one common gratuity formula

It does not.

Kuwait, UAE, Saudi Arabia, Qatar, Bahrain and Oman have different rules.

Mistake 2: Calculating gratuity using total salary

Some countries calculate end-of-service benefits using the basic wage, while other employment payments may use a different wage definition.

Always identify the correct legal calculation base.

Mistake 3: Ignoring the notice period

An employee may focus entirely on gratuity and forget that an unserved notice period can create a separate compensation issue.

Mistake 4: Treating transfer as resignation

A company restructuring, ownership transfer or approved employer-change process is not necessarily the same as voluntarily ending employment.

Mistake 5: Signing a settlement without checking the figures

Before signing, compare:

Salary + Notice + Indemnity + Leave + Other Dues – Lawful Deductions

with the amount shown in the final settlement.

How to Calculate Your GCC Indemnity

The basic process is:

Step 1 – Identify your country.

Step 2 – Check your employment category.

Step 3 – Identify your basic salary/wage.

Step 4 – Calculate your completed service period.

Step 5 – Check whether you are resigning, being terminated or transferring.

Step 6 – Check the applicable notice period.

Step 7 – Calculate unused leave and other final entitlements.

Step 8 – Check the final settlement against your employment records.

For a starting estimate, you can use the IndianInQ8:

Gulf Gratuity & Indemnity Calculators

You can also check the dedicated:

Kuwait Indemnity Calculator

and:

UAE Gratuity Calculator

Simple GCC Final Settlement Example

Imagine an employee has:

Monthly salary: KWD 700
Basic salary: KWD 500
Service: 6 years
Unused leave: 15 days
Notice period: 3 months
Notice served: 3 months

The final settlement should not simply be:

6 years × one formula

Instead, it should be broken into separate components:

Component	What to Check
Final salary	Salary earned until final working date
Notice pay	Whether the full notice was served
Indemnity	Country-specific formula
Leave pay	Unused eligible leave
Other benefits	Contractual/statutory amounts
Deductions	Only lawful/valid deductions
Final settlement	Total amount payable

This approach makes it much easier to identify an incorrect calculation.

Frequently Asked Questions

1. Is indemnity the same in all GCC countries?

No. Each GCC country has its own employment legislation and calculation rules.

2. Is gratuity calculated on basic salary?

In many GCC systems, end-of-service benefits use the basic wage as the calculation base. For example, UAE and Qatar have specific rules using basic wage, while other payments such as notice compensation can use a different wage definition.

Always check the country’s applicable law.

3. Does resignation mean I lose my indemnity?

Not automatically.

The consequences of resignation depend on the country, length of service, contract type and circumstances.

Saudi Arabia, for example, has specific rules that reduce the end-of-service award for certain resignations depending on continuous service.

4. Can my employer ask me to leave immediately?

An employer may have legal options to release an employee from working during a notice period in certain circumstances, but the financial and employment consequences depend on the country’s labour law.

Get the instruction and final employment date in writing.

5. What happens if I do not complete my notice period?

The party that fails to observe the applicable notice period may have to pay compensation for the unserved period, depending on the country’s law.

6. Can my employer deduct notice pay from my final settlement?

A lawful deduction may be possible depending on the country and circumstances, but employees should check the legal basis and calculation.

Do not assume every deduction made by an employer is automatically valid.

7. Does changing employers reset my service period?

It can, but not in every situation.

An ownership transfer, merger or legally recognized business transfer may preserve continuity of service.

A completely new employment relationship with a different employer can be different.

8. If my company changes ownership, do I lose my old service?

Not necessarily.

For example, Saudi Arabia’s Labour Law specifically provides for continuity of employment contracts when establishment ownership is transferred or its legal form changes through merger, division or similar changes.

Other GCC countries have their own rules.

9. Does transferring to another GCC country transfer my gratuity?

Usually, you should not assume that it does.

Moving from Kuwait to UAE, for example, involves two different labour systems. Your Kuwait employment should be settled according to Kuwait’s applicable rules, while your new UAE employment is governed by UAE law.

10. What documents should I keep after leaving a GCC job?

Keep:

Employment contract
Salary slips
Civil ID/work permit records
Resignation or termination letter
Notice letter
Final settlement
Leave balance
Service certificate
Transfer documents
Work-permit cancellation/transfer records
Bank payment evidence

These documents can be extremely useful if there is later a disagreement about your final settlement.

11. How can I calculate my Kuwait indemnity?

Use the IndianInQ8 Kuwait Indemnity Calculator and compare the estimate with your employment records and applicable Kuwait labour-law provisions.

12. How can I calculate UAE gratuity?

Use the IndianInQ8 UAE Gratuity Calculator and enter your basic salary and service information.

13. Where can I check official GCC labour information?

Employees should use their country’s official labour authority whenever possible.

Useful official authorities include:

Kuwait Public Authority for Manpower
UAE Ministry of Human Resources and Emiratisation
Saudi Ministry of Human Resources and Social Development
Qatar Ministry of Labour
Bahrain Labour Market Regulatory Authority
Oman Ministry of Labour

Government websites should be treated as the primary source when checking current procedures, forms and amendments.

Official GCC Labour Resources

Kuwait – Kuwait Public Authority for Manpower publishes the Private Sector Labour Law and related labour information.

UAE – The UAE Ministry of Human Resources and Emiratisation publishes the federal employment legislation and worker guidance.

Saudi Arabia – The Ministry of Human Resources and Social Development publishes Saudi Labour Law provisions relating to contracts, termination, notice, transfers and end-of-service awards.

Qatar – The Qatar Ministry of Labour publishes Labour Law documents and electronic employment services, including employer-change procedures.

Bahrain – The Labour Market Regulatory Authority publishes Bahrain’s Labour Law and information relating to employment and work permits.

Oman – The Oman Ministry of Labour publishes the current Labour Law and related employment services.

Final Takeaway

Before resigning or changing jobs in the GCC, do not look at the gratuity figure alone.

A proper employment settlement can involve several separate items:

Final Salary + Notice + End-of-Service Indemnity + Leave Balance + Other Entitlements – Lawful Deductions

The rules are different in Kuwait, UAE, Saudi Arabia, Qatar, Bahrain and Oman.

The safest approach is to identify your country, contract type, service period, salary basis and reason for leaving before calculating your final entitlement.

If you are planning to resign, transfer or change employers, check the notice period before submitting your resignation. A few minutes of checking the applicable rules can prevent a costly mistake later.

Related IndianInQ8 Calculators

Use these calculators as estimates and verify the final amount against the applicable labour law, employment contract and official government guidance.