GCC Salary Glossary

Key compensation, labour law, and employment terms used across the Gulf Cooperation Council countries.

1

13th-Month Salary: An additional month of salary paid to employees at the end of the year, common in some multinational companies operating in the GCC. While not mandated by UAE, Saudi, or Qatari labour law, a 13th-month payment may be stipulated in the employment contract or company policy. It is typically equal to one month of basic salary.

A

ADLSA (Administration of Labour and Social Affairs): The Qatari government ministry responsible for regulating the labour market, enforcing employment law, and resolving labour disputes. ADLSA oversees work permit issuance, contract registration, and the Wage Protection System in Qatar. It also manages the electronic labour contract system for all private-sector employees.
Absconding: A legal status applied when an employee leaves their employer without following proper resignation procedures. In the GCC, absconding is reported to immigration authorities and can result in a labour ban, fines, and deportation. Employees accused of absconding may have difficulty obtaining future work permits in the region.
Annual Leave Entitlement: The number of paid vacation days an employee is legally entitled to per year. In the UAE, employees receive 30 calendar days after one year of service. Saudi Arabia provides 21 days, increasing to 30 days after five years. Qatar grants a minimum of three weeks per year.

B

Basic Salary: The fixed portion of an employee's compensation, excluding allowances, bonuses, and benefits. In the GCC, the basic salary is typically 50-60% of total compensation and is the figure used to calculate end-of-service gratuity, pension contributions, and overtime pay.

D

DEWS (DIFC Employee Workplace Savings): A defined-contribution savings scheme introduced in the Dubai International Financial Centre (DIFC) in 2020 as an alternative to the traditional end-of-service gratuity system. Employers contribute a percentage of basic salary monthly into a professionally managed investment fund. Employees can choose their risk profile and access their savings upon leaving.
DIFC Employment Law: A separate employment law regime that applies exclusively to companies and employees registered in the Dubai International Financial Centre. DIFC Law No. 2 of 2019 governs employment contracts, termination, discrimination, and benefits within the DIFC. It differs from UAE Federal labour law in areas such as overtime, leave, and dispute resolution.

E

Emiratization: A UAE government policy requiring private-sector companies to employ a minimum percentage of Emirati nationals. Companies that fail to meet Emiratization targets face financial penalties of AED 6 000 (~€1 500) per month per missing Emirati hire. The programme applies primarily to companies with 50 or more employees and targets increase annually.
End of Service Gratuity (EOSG): A lump-sum payment made to employees upon termination of employment in the GCC. In the UAE, it is calculated as 21 days of basic salary per year for the first five years, and 30 days per year thereafter. Saudi Arabia and Qatar have similar but distinct calculation formulas based on the latest basic salary.

F

Final Settlement: The total amount owed to an employee when their employment ends. It includes unpaid salary, accrued annual leave, end-of-service gratuity, repatriation costs, and any other contractual entitlements. Employers in the UAE must pay the final settlement within 14 days of the last working day.

G

GOSI (General Organization for Social Insurance): The Saudi Arabian government entity responsible for managing social insurance programmes. GOSI collects contributions from employers (12%) and Saudi employees (10%) to fund pensions, occupational hazard insurance, and unemployment benefits. Non-Saudi employees are covered only for occupational hazards at 2%.
GPSSA (General Pension and Social Security Authority): The UAE federal authority that manages pension and social security for Emirati nationals. Employers contribute 12.5% and employees contribute 5% of the monthly salary. The GPSSA does not apply to expatriate employees, who receive end-of-service gratuity instead.
Gross Salary: The total compensation package before any deductions, including basic salary plus all allowances (housing, transport, phone, etc.). In the GCC, the gross salary is the headline figure in a job offer. Since there is no personal income tax in most GCC countries, gross and net salary are often the same, minus social insurance contributions for nationals.

H

Housing Allowance: A monthly payment provided by the employer to cover an employee's accommodation costs. In the GCC, housing allowances typically represent 25-40% of total compensation. Some employers provide company accommodation instead of a cash allowance, particularly for blue-collar workers.

I

Iqama (Saudi Residence Permit): The official residence permit issued to foreign nationals in Saudi Arabia. The iqama is tied to the sponsoring employer and must be renewed annually. It serves as the holder's primary identification document and is required for banking, renting property, driving, and accessing government services. Employers are responsible for its issuance and renewal costs.

K

Kafala System: A sponsorship system historically used across the GCC that ties a foreign worker's immigration status to their employer (sponsor). While reforms have been introduced in several GCC countries to allow greater worker mobility, the system still influences visa issuance, contract terms, and the ability to change employers.

L

Labour Ban: A restriction placed on an employee that prevents them from obtaining a new work permit in the same country for a specified period. Labour bans may be imposed for absconding, contract violations, or failing to complete a minimum service period. Recent UAE reforms have sharply reduced the circumstances under which bans apply.
Labour Card: An official identification document issued by the Ministry of Labour (or equivalent) that permits a foreign national to work legally in a GCC country. The labour card contains the employee's personal details, employer information, and job title. It must be renewed annually and is required for all formal employment.
Limited Contract: A fixed-term employment contract with a specified end date, commonly used in the GCC. Under UAE labour law (Federal Decree-Law No. 33 of 2021), all contracts are now treated as limited (fixed-term) with a maximum duration of three years, renewable. Early termination by either party may trigger a compensation payment as specified in the contract.
LMRA (Labour Market Regulatory Authority): The Bahraini government authority responsible for regulating the labour market, issuing work permits, and managing the Flexi Permit scheme. While based in Bahrain, LMRA is referenced across Gulf employment discussions as a model for labour market reform. It operates the Expat Management System for employer-employee registration.

M

Maternity Leave: Paid leave granted to female employees around childbirth. In the UAE, maternity leave is 60 calendar days: 45 days at full pay and 15 days at half pay. Saudi Arabia provides 10 weeks at full pay. Qatar offers 50 days at full pay. Paternity leave is also available in the UAE (5 working days) and is growing in adoption across the GCC.
MOHRE (Ministry of Human Resources and Emiratisation): The UAE federal ministry responsible for regulating the private-sector labour market, issuing work permits, and enforcing employment law. MOHRE oversees the Wage Protection System, processes work permit applications, mediates employment disputes, and administers the Emiratization programme.

N

Net Salary: The amount an employee actually receives after all deductions. In GCC countries without personal income tax (UAE, Qatar, Kuwait, Bahrain), the net salary typically equals the gross salary. In Saudi Arabia, non-Saudi employees also receive their full gross salary, while Saudi nationals have 10% GOSI deducted. Home-country tax obligations may still apply for some expatriates.
Nitaqat (Saudization Programme): Saudi Arabia's labour nationalisation programme that classifies companies into colour-coded bands based on their percentage of Saudi employees. Companies in the green and platinum bands receive preferential treatment for visa processing, while those in the red band face restrictions on hiring foreign workers and may have their services frozen.
NOC (No Objection Certificate): A letter issued by an employer confirming that they have no objection to their employee undertaking a specific action, such as changing jobs, obtaining a driving licence, or sponsoring family members. In the GCC, an NOC is frequently required by government authorities and banks. Under recent UAE reforms, an NOC is no longer needed to change employers in most cases.
Notice Period: The advance warning period required before an employee or employer can terminate an employment contract. In the UAE, the statutory minimum is 30 days, though contracts may specify up to 90 days. During the notice period, employees continue to work and receive their regular salary and benefits.

O

Overtime Pay: Additional compensation paid for hours worked beyond the standard working week. In the UAE, overtime is paid at 125% of the normal hourly rate, rising to 150% for work between 10 PM and 4 AM. Saudi Arabia and Qatar have similar overtime regulations with comparable premium rates.

P

Probation Period: An initial trial period at the start of employment during which either party can terminate the contract with shorter notice. In the UAE, the probation period is a maximum of six months. During probation, employees are typically not entitled to end-of-service gratuity or paid annual leave.

Q

Qatarization: Qatar's national workforce localisation programme requiring private-sector companies to employ a percentage of Qatari nationals. Sectors such as energy, banking, and insurance have the highest quotas. Companies that fail to meet targets face restrictions on work permit issuance and may be required to submit action plans for compliance.

R

Repatriation Ticket: An airline ticket that the employer is legally required to provide to return the employee to their home country at the end of employment. Under UAE, Saudi, and Qatari labour law, the employer bears this cost unless the employee immediately takes up new employment in the same country. Some contracts also include annual return flights as a benefit.

S

Salary Certificate: An official letter issued by an employer confirming an employee's position, salary, and employment dates. Salary certificates are routinely required in the GCC for visa applications, bank account openings, loan approvals, and tenancy agreements. They must be on company letterhead and bear an official stamp.
Sick Leave: Paid or partially paid leave granted to employees who are medically unfit to work. In the UAE, employees are entitled to 90 days of sick leave per year: 15 days at full pay, 30 days at half pay, and 45 days unpaid. Saudi Arabia provides 30 days at full pay, 60 at 75%, and 30 unpaid per year.

T

Tawteen: A workforce localisation programme in Oman (also called Omanization) requiring private-sector companies to employ a minimum percentage of Omani nationals. Quotas vary by sector, with banking, insurance, and retail having some of the highest requirements. Companies that fail to meet targets face licence restrictions or financial penalties.
Tax-Free Income: A term describing the absence of personal income tax in most GCC countries. The UAE, Qatar, Saudi Arabia, Kuwait, Bahrain, and Oman do not levy personal income tax on employment income. However, employees may still be subject to social security contributions, VAT on purchases, and taxes in their home country.
Transportation Allowance: A monthly payment provided by the employer to cover commuting and transportation costs. In the GCC, transportation allowances are a standard component of compensation packages and typically range from 5-15% of total salary. Some employers provide a company vehicle or driver instead of a cash allowance.

U

Unlimited Contract: A legacy contract type under the previous UAE labour law that had no fixed end date. Since February 2022, all UAE employment contracts must be converted to limited (fixed-term) contracts of up to three years. The term is still used colloquially and in older contracts. Saudi Arabia and Qatar continue to recognise open-ended employment contracts.

W

Work Permit: A government-issued document that authorises a foreign national to be employed in a GCC country. Work permits are typically sponsored by the employer and are tied to a specific job and employer. They must be obtained before the employee can start working and are usually valid for one to two years.
WPS (Wage Protection System): An electronic salary transfer system used in the UAE, Saudi Arabia, and other GCC countries to ensure employers pay wages on time and in full. Employers must transfer salaries through approved banks or exchange houses, and the system alerts authorities to late or missing payments.