End-of-service gratuity in Jordan: who gets it and how to calculate it
Article 32 of the Labour Law for HR and finance teams: who is owed it, the wage to use, resignation and dismissal, and monthly provisions.
In Jordan, the end-of-service gratuity under Article 32 of the Labour Law is one month's last wage for each year of actual service, pro-rated for part of a year, whatever the reason the service ends. It is owed only to workers not covered by the Social Security Law, which now covers most private-sector employees; insured workers rely on Social Security benefits unless their contract grants a gratuity. Resignation doesn't reduce it: Jordan has no one-third or two-thirds rule.
Who is entitled to end-of-service gratuity in Jordan
Article 32 of the Labour Law gives the gratuity to a worker who meets two conditions: the worker isn't subject to the Social Security Law, and the service has ended, for any reason. The worker then receives a month's wage for each year of actual service and a proportional amount for part of a year.
The first condition decides most cases. Article 4 of the Social Security Law No. 1 of 2014 covers every worker under the Labour Law aged 16 or over, whatever their nationality, contract or pay basis, and Article 6 makes that insurance compulsory. So a typical private-sector employee isn't owed the gratuity under Article 32, and the end-of-service calculator shows zero for an insured worker.
Cases worth a closer look
- Irregular workers in the Social Security Law's sense (Article 4(b)): a day, hourly or piece-rate worker who works fewer than 16 days in a month. A monthly-paid worker counts as regular, except in the first month.
- Staff whose contract or internal rules promise a gratuity. That isn't Article 32, but Article 4(a) of the Labour Law preserves any better right a contract grants, so the promise binds the employer.
- Service outside social security, or a worker who should have been insured but was never registered. Article 4 defines coverage by the work, not by registration, so take such a case to a lawyer, not a calculator.
How end-of-service gratuity is calculated: one month per year, pro-rated
Article 32 sets the gratuity at one month's wage for each year of actual service, and a proportional amount for part of a year. The wage is the last one the worker received, so every year is priced at the final wage, not at what was earned that year.
As a formula: gratuity = last monthly wage × years of service. The law doesn't say how to measure the part year; our calculator counts it in days, dividing service days by 365.
What counts as service
- The notice period. Article 23 counts notice as service, even if the employer excused the worker from working it.
- Probation, once the worker stays on after it (Article 35).
- Short breaks. Article 32 treats gaps of no more than 60 days between one period of work and the next as continuous employment.
- Unpaid leave is the open question: the law says actual service without defining it, and the calculator takes unpaid days off. Confirm long absences before you settle.
What counts as the wage: fixed allowances and commission averages
Article 2 of the Labour Law defines the wage broadly: what the worker earns for the work in cash or in kind, plus any other entitlement the law, the contract, the internal regulation or settled practice provides for. Only overtime pay is excluded. That is wider than the basic salary on most payslips.
| Pay item | In the wage? | Basis |
|---|---|---|
| Basic salary | Yes | Article 2 |
| Fixed allowances in the contract or internal regulation | Yes, as a rule | Article 2 |
| A payment made regularly for years, unwritten | Likely | Article 2: settled practice |
| Commission or piece-rate pay | Yes, averaged | Article 32: monthly average of the last 12 months |
| Benefits in kind, such as housing provided | Can be | Article 2 covers wage paid in kind |
| Overtime pay | No | Excluded by Article 2 |
Two consequences follow. A late raise lifts the whole gratuity, because every past year is repriced at the new wage. And cutting an allowance before an exit backfires: Article 29 lets a worker whose wage is reduced leave without notice and keep their end-of-service rights.
Worked examples: insured versus not insured, full and partial years
These cases come from the end-of-service calculator, so the figures match it. Amounts are in JOD.
| Case | Service | Last monthly wage | Service days | Years | Gratuity |
|---|---|---|---|---|---|
| Not insured | 1 January 2020 to 30 June 2023 | 1,000 | 1,277 | 3.4986 | 3,498.630 |
| Not insured, under a year | 1 March 2025 to 31 August 2025 | 650 | 184 | 0.5041 | 327.671 |
| Not insured, 45 unpaid days | 1 April 2016 to 31 March 2026 | 1,450.5 | 3,607 | 9.8822 | 14,334.119 |
| Insured with social security | 1 September 2018 to 31 August 2026 | 900 | 2,922 | 8.0055 | 0.000 |
Service of under a year still earns a gratuity (second row), and unpaid days come off before pricing (third row).
Resignation, dismissal and fixed-term contracts: what changes
Article 32 applies when the service ends "for any reason". How someone leaves changes the notice and may add other claims, but not the gratuity of an uninsured worker. The one exception is probation.
| How the service ends | Article 32 gratuity | What else applies |
|---|---|---|
| Resignation with notice | Full | One month's written notice; leaving early costs the worker that wage (Article 23) |
| Leaving without notice under Article 29 | Full | Rights kept; notify the ministry within two weeks |
| Dismissal with notice | Full | Notice pay, even if excused from work (Article 23) |
| Dismissal without notice under Article 28 | Full | Article 28 removes the notice, not the gratuity |
| Arbitrary dismissal | Full | A separate claim in court (Article 25) |
| The employer ends a fixed-term contract early | Full | Wages to the end of the term, unless an Article 28 dismissal (Article 26) |
| The worker ends a fixed-term contract early, outside Article 29 | Full | Possible damages, capped at half a month's wage per month left (Article 26) |
| The employer ends employment during probation | None | No notice or gratuity; probation is three months at most (Article 35) |
| Death of the worker | Full, to the heirs | Article 34 |
A settlement that waives the gratuity doesn't make it go away. Article 4(b) voids any term in which a worker gives up a right the law grants, and under Article 46 signing a payroll receipt doesn't waive any balance still owed.
What an insured employee receives from social security instead
Article 3 of the Social Security Law lists its insurances: work injury; old age, disability and death; maternity; unemployment; and health. For a leaver, three benefits matter; check the current text and the Corporation's figures before advising anyone.
- A pension, once the insured meets the age and contribution conditions for the old-age pension (Article 62) or another pension the law provides.
- Lump-sum compensation (Article 70), paid instead of a pension when service ends through death, natural disability or reaching pension age without meeting the pension conditions, and in the cases of leaving the law's scope that the regulations define.
- Unemployment benefit (Articles 50 to 53): with at least 36 contributions, a monthly benefit at a falling share of the last insured wage, for three months, or six with 180 contributions. What is left in the insured's unemployment savings account is paid out on final exit from the law (Article 57).
On top of these, Article 33 of the Labour Law keeps any entitlement from a company savings, provident or pension fund. And an employer that promised insured staff a gratuity must pay it (Article 4(a)).
The employer funds this through its monthly contribution of 14.25% of the insured wage, beside the employee's 7.5%; our social security guide covers the rates and the changes under discussion.
Provisioning end-of-service liability every month
For each uninsured employee, the liability on any date is what Article 32 would pay if the service ended that day: current wage × service to date. Booking it monthly avoids a cash shock when a long-serving employee leaves.
The provision grows in two ways: each month of service adds a twelfth of a month's wage, and a raise adds a catch-up for all past service. An employee with four years' service whose wage rises from 800 to 880 JOD adds 4 × 80 = 320 JOD at once.
Your auditor sets the measurement method for your financial statements. Insured employees carry no Article 32 liability, so provide for them only where a contract or policy grants a gratuity.
Records that make the final settlement easy
- The start date, the notice dates and the last working day.
- Unpaid leave and breaks between periods of work.
- The wage history with allowances, and twelve months of commission for anyone paid that way.
- Social security status and registration date.
Article 138 bars claims for Labour Law rights two years after their cause arises. On exit, Article 30 obliges the employer to give a service certificate on request and return the worker's papers.
In Link HR payroll, end of service is priced in the final settlement run with the same rule for every employee, next to the last salary, tax and social security.
Sources
Figures follow the rules in force on 6 October 2026, the same ones our calculators use. This guide is general information, not legal advice; for a specific case, check the official text or ask a lawyer.