UAE & Saudi Labour Law End-of-Service Changes in 2026 — What Changed and What Didn't

Search results for "labour law changes" fill up quickly with confident-sounding claims, and end-of-service rules are exactly the kind of money question where a wrong "update" can cost you thousands. So this page does the opposite of guessing: it lists only the changes we can tie to a primary or official source, with the date each one took effect, and then says plainly which things have not changed.

If you have read elsewhere that a formula "changed in 2026" and you do not see it confirmed below, treat that claim with caution. As of June 2026, the two real, sourced shifts that affect end-of-service planning are the UAE's voluntary savings scheme and Saudi Arabia's new Social Insurance Law — and neither one rewrites the core gratuity calculation. The detail matters, so each is dated and explained below.

This is an authority-and-freshness reference. For the full mechanics of each country's system, see our pillars on Saudi labour law end-of-service and the UAE labour law end-of-service rules.

The most significant structural change to UAE end-of-service in recent years is the Voluntary Alternative End-of-Service Benefits Scheme — usually called the "Savings Scheme." It was established by Cabinet Resolution No. 96 of 2023 (issued 10 October 2023), and the Ministry of Human Resources and Emiratisation (MoHRE) issued fuller implementation guidance in November 2025, which is why you are seeing more about it now.

What it actually does

Instead of an employer holding a notional gratuity liability and paying a lump sum when you leave, an enrolled employer makes monthly contributions into a regulated, licensed investment fund on your behalf. The aim is to protect the value of your end-of-service money from inflation and from the risk of employer insolvency, and to let it grow through investment returns.

Is it mandatory? No — and here is the key point

The scheme is voluntary for employers. If your employer has not enrolled, nothing about your entitlement changes — the traditional Article 51 gratuity continues to apply to you in full. If your employer has enrolled and you are among the employees selected to participate, your future service accrues under the fund rather than as a lump-sum gratuity. Existing accrued entitlement from before enrolment is preserved.

So this is best understood as a new option layered on top of the existing law, not a replacement of it. For the overwhelming majority of private-sector workers in June 2026, the lump-sum gratuity under Decree-Law 33/2021 is still the system that governs their payout. We walk through how the scheme compares with traditional gratuity in the UAE labour law guide.

Saudi Arabia's new Social Insurance Law was enacted on 3 July 2024 and came into force on 3 July 2025. It is administered through the General Organisation for Social Insurance (GOSI). Because it changes retirement provisions, it is easy to confuse with end-of-service benefit (ESB) — so it is worth being precise about what it does and does not touch.

What changed

• Retirement age. The statutory retirement age is being raised toward 65 Gregorian years, with transitional brackets that place an individual's retirement age somewhere between 58 and 65 depending on their age and contribution history.
• Contribution rates. Employee and employer contribution rates rise gradually from 9% to 11%, increasing by 0.5% a year between 2025 and 2028.

Who it applies to

The retirement-age and early-retirement contribution changes apply to new entrants to the workforce and to Saudi nationals who, on 3 July 2024, were under 50 Hijri years of age or had fewer than 20 years of contributions. For current subscribers outside that group, GOSI has stated their benefits are unchanged. Most expatriate workers are not in the GOSI pension system at all — their end-of-service entitlement runs through the Labour Law, not this reform.

Why it does not change your ESB calculation

This is a pension / retirement-age reform, not a change to the end-of-service benefit formula. Your ESB is still calculated under Article 84 (accrual) and Article 85 (resignation reductions) of the Labour Law, exactly as before. The Social Insurance Law affects when a Saudi national can draw a pension and how much is contributed to GOSI — not the half-month / full-month gratuity accrual that ends an employment contract. We cover the unchanged ESB method in the Saudi labour law end-of-service guide.

This is the section most "law changes" articles skip, and it is the one that matters most for working out your payout. As of June 2026, the actual end-of-service calculation in both countries is the same as it has been:

UAE — Federal Decree-Law No. 33 of 2021, Article 51

• 21 days' basic salary for each of the first 5 years of service.
• 30 days' basic salary for each year beyond the fifth.
• Calculated on basic salary (not housing, transport or other allowances), with the total capped at two years' wage.
• No resignation penalty since the 2021 law — resignation and termination are treated the same for the gratuity rate.

An enforcement-focused update, Federal Decree-Law No. 9 of 2024 (effective 31 August 2024), strengthened penalties and compliance monitoring, but it did not change the gratuity calculation itself.

KSA — Labour Law, Articles 84 and 85

• Half a month's wage per year for the first 5 years; one month's wage per year thereafter, on the last actual wage (basic plus fixed allowances).
• Resignation reductions under Article 85: 1/3 of the award for 2-to-5 years, 2/3 for 5-to-10 years, full award at 10+ years; full award on force majeure.

Beyond the two reforms above, we have found no change confirmed as of June 2026 to the gratuity/ESB formulas, the basic-salary basis in the UAE, the basic-plus-allowances basis in KSA, the UAE two-year cap, or the Saudi resignation tiers. If a source claims one of these changed in 2026 without citing the amending law, do not rely on it — verify it against the official portals linked below first.

Putting the dated picture together, here is the practical takeaway for 2026:

• If you are in the UAE and your employer has not enrolled in the Savings Scheme, calculate your gratuity exactly as before, under Article 51. The scheme only matters to you if you have been told you are enrolled.
• If you are in the UAE and you are enrolled in the Savings Scheme, your future entitlement is a fund balance, not a formula — ask your employer or fund provider for your current balance and contribution rate, and note that your pre-enrolment gratuity is preserved separately.
• If you are in Saudi Arabia, your end-of-service benefit is unaffected by the new Social Insurance Law — use Article 84 and 85 as usual. The reform only changes pension/retirement-age rules for those it applies to.

To run your own up-to-date figure, use our country calculators — they apply the current Article 51 (UAE) and Article 84/85 (KSA) rules, with each step shown — and keep an eye on the official portals in the sources block below, which are the only place a genuine future change will appear first.