Retirement and end-of-service planning in the Middle
East is coming of age, and now is the time for employers to prepare
to meet their lump sum payment obligations.
Gratuity = a sum of money paid to an employee at the end of a
period of employment. 'An end-of-contract gratuity of 20% of
the total pay received' (Oxford dictionary).
Employers in the Middle East are legally required to pay an
EOSG, to all workers at the end of their contract, whether at
retirement age or not.
The end of service gratuity (EOSG) is traditionally unfunded and
simply an actuarial calculation on the employer's balance
sheet.
The amount that can be accrued by an employee is therefore not
particularly generous, and there is normally no facility for
employees to accrue additional 'gratuity' or any type of
individual savings.
