Ninety per cent of companies in the Middle East provide employees with end-of-service benefits upon termination, while 10 per cent said they provide the benefit at more frequent intervals, according to the research. Getty
Ninety per cent of companies in the Middle East provide employees with end-of-service benefits upon termination, while 10 per cent said they provide the benefit at more frequent intervals, according to the research. Getty
Ninety per cent of companies in the Middle East provide employees with end-of-service benefits upon termination, while 10 per cent said they provide the benefit at more frequent intervals, according to the research. Getty
Ninety per cent of companies in the Middle East provide employees with end-of-service benefits upon termination, while 10 per cent said they provide the benefit at more frequent intervals, according t

Majority of Middle East companies offer end-of-service benefits to employees


Deepthi Nair
  • English
  • Arabic

More companies in the Middle East are providing end-of-service benefits (ESB) to employees as countries move to make the gratuity payment model mandatory, according to a new survey by global advisory company WTW and professional services provider Equiom.

About 78 per cent of companies polled in the survey now pay ESB to staff, saying it was required by law in their countries of operation.

Companies that do not yet provide ESB said it was either not mandatory or they provided retirement and savings benefits in lieu of the payment.

“Ninety per cent of companies provide employees with ESB upon termination, while 10 per cent said they provide the benefit at more frequent intervals, for instance, annually,” WTW said.

The survey polled 121 multinational and domestic organisations in the oil and gas, banking and finance, manufacturing, and pharmaceuticals sectors.

End-of-service gratuities are lump-sum payments that all employed residents are entitled to after completing at least one year of service. Gratuity payments are covered by UAE labour law and the sum depends on an employee’s length of service and basic salary.

Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, launched a new savings pension plan for non-Emirati employees working in the Dubai government, which took effect on July 1, with the scope of expanding it into the private sector at a later date.

Foreign employees working in Dubai’s public sector are enrolled in the pension scheme by default. The employer will contribute the total end-of-service gratuity to the plan from the date of joining, without including the financial dues for previous years of service.

On average, 45 per cent of companies in the Middle East expect employees to stay for five to 10 years, while 23 per cent expect them to stay for 10 years or longer, the WTW survey found.

“The implications of longer expected future service combined with higher inflation and rising salary costs is likely to signify a sharp increase in future ESB liabilities,” according to WTW.

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About 66 per cent of companies in the region provide enhanced ESB to all employees, WTW said.

A minority of companies only offer enhanced ESB to specific categories of employees, such as local non-nationals, international assignees and top management.

Forty-seven per cent of companies cited “industry best practice” as the most common reason for enhancing benefits this year, followed by 44 per cent that chose “retention of key talent” and 38 per cent that highlighted “local best practice”.

Companies provide enhanced ESB in a variety of situations: 84 per cent offer it when an employee retires, 81 per cent when staff are made redundant or when a worker dies, 63 per cent for resignations and 44 per cent during termination, the survey said.

Companies that provide enhanced ESB through the defined benefit formula most commonly use an employee’s length of service to determine the pay out, according to the survey. Other factors include job grade, equalisation of benefits between countries and early retirement.

Offering a separate defined contribution (DC) pension or long-term savings plan remains the most popular way of enhancing ESB.

About 24 per cent of companies in the region offer a DC retirement or long-term savings plan to their employees.

Long-term savings or retirement plans are most frequently offered in Egypt, Qatar, Kuwait, the UAE and Turkey, according to WTW.

The Dubai International Financial Centre was the first entity in the UAE to set up a new gratuity system when it introduced the DIFC Employee Workplace Savings (Dews) plan in February 2020, offering ESB to people working within the financial centre.

The scheme allows participants to choose a plan that is in line with the type of investment risk they are willing to take.

Stage results

1. Julian Alaphilippe (FRA) Deceuninck-QuickStep  4:39:05

2. Michael Matthews (AUS) Team BikeExchange 0:00:08

3. Primoz Roglic (SLV) Jumbo-Visma same time 

4. Jack Haig (AUS) Bahrain Victorious s.t  

5. Wilco Kelderman (NED) Bora-Hansgrohe s.t  

6. Tadej Pogacar (SLV) UAE Team Emirates s.t 

7. David Gaudu (FRA) Groupama-FDJ s.t

8. Sergio Higuita Garcia (COL) EF Education-Nippo s.t     

9. Bauke Mollema (NED) Trek-Segafredo  s.t

10. Geraint Thomas (GBR) Ineos Grenadiers s.t

Brief scores:

Liverpool 3

Mane 24', Shaqiri 73', 80'

Manchester United 1

Lingard 33'

Man of the Match: Fabinho (Liverpool)

Teenage%20Mutant%20Ninja%20Turtles%3A%20Shredder's%20Revenge
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The National Archives, Abu Dhabi

Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.

Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en

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Director: Rohit Shetty

Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone

Rating: 3/5

War and the virus
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Starring: Bdoor Mohammad, Jasem Alkharraz, Iman Tarik, Sarah Taibah

Director: Majid Al Ansari

Rating: 4/5

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Company%20profile
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The biog

Favourite film: The Notebook  

Favourite book: What I know for sure by Oprah Winfrey

Favourite quote: “Social equality is the only basis of human happiness” Nelson Madela.           Hometown: Emmen, The Netherlands

Favourite activities: Walking on the beach, eating at restaurants and spending time with friends

Job: Founder and Managing Director of Mawaheb from Beautiful Peopl

THE TWIN BIO

Their favourite city: Dubai

Their favourite food: Khaleeji

Their favourite past-time : walking on the beach

Their favorite quote: ‘we rise by lifting others’ by Robert Ingersoll

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

MATCH INFO

Manchester City 1 (Gundogan 56')

Shakhtar Donetsk 1 (Solomon 69')

While you're here
Women's Prize for Fiction shortlist

The Silence of the Girls by Pat Barker

My Sister, the Serial Killer by Oyinkan Braithwaite

Milkman by Anna Burns

Ordinary People by Diana Evans

An American Marriage by Tayari Jones

Circe by Madeline Miller

The specs

Engine: 2.0-litre 4cyl turbo

Power: 261hp at 5,500rpm

Torque: 405Nm at 1,750-3,500rpm

Transmission: 9-speed auto

Fuel consumption: 6.9L/100km

On sale: Now

Price: From Dh117,059

Monday's results
  • UAE beat Bahrain by 51 runs
  • Qatar beat Maldives by 44 runs
  • Saudi Arabia beat Kuwait by seven wickets
The specs

Price: From Dh180,000 (estimate)

Engine: 2.0-litre turbocharged and supercharged in-line four-cylinder

Transmission: Eight-speed automatic

Power: 320hp @ 5,700rpm

Torque: 400Nm @ 2,200rpm

Fuel economy, combined: 9.7L / 100km

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Director: Christian Carion

Starring: James McAvoy, Claire Foy, Tom Cullen, Gary Lewis

Rating: 2/5

How the UAE gratuity payment is calculated now

Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.

The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.

1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):

a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33

b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.

2. For those who have worked more than five years

c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.

Note: The maximum figure cannot exceed two years total salary figure.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

COMPANY PROFILE

Name: Cofe

Year started: 2018

Based: UAE

Employees: 80-100

Amount raised: $13m

Investors: KISP ventures, Cedar Mundi, Towell Holding International, Takamul Capital, Dividend Gate Capital, Nizar AlNusif Sons Holding, Arab Investment Company and Al Imtiaz Investment Group 

BULKWHIZ PROFILE

Date started: February 2017

Founders: Amira Rashad (CEO), Yusuf Saber (CTO), Mahmoud Sayedahmed (adviser), Reda Bouraoui (adviser)

Based: Dubai, UAE

Sector: E-commerce 

Size: 50 employees

Funding: approximately $6m

Investors: Beco Capital, Enabling Future and Wain in the UAE; China's MSA Capital; 500 Startups; Faith Capital and Savour Ventures in Kuwait

COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EShaffra%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2023%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDIFC%20Innovation%20Hub%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3Emetaverse-as-a-Service%20(MaaS)%3Cbr%3E%3Cstrong%3EInvestment%3A%20%3C%2Fstrong%3Ecurrently%20closing%20%241.5%20million%20seed%20round%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3Epre-seed%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%20Abu%20Dhabi%20and%20different%20PCs%20and%20angel%20investors%20from%20Saudi%20Arabia%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%20%3C%2Fstrong%3Enine%3C%2Fp%3E%0A
The specs
  • Engine: 3.9-litre twin-turbo V8
  • Power: 640hp
  • Torque: 760nm
  • On sale: 2026
  • Price: Not announced yet
Updated: September 15, 2022, 3:30 AM