Work out the end-of-service gratuity you are owed as a private-sector employee in the UAE, from your last basic salary and length of service.
Tax year Federal Decree-Law No. 33 of 2021Rules checked: November 2026How we calculate
End-of-service gratuityAED 60,000paid within 14 days of termination
Days of wage earned
180 days
Daily basic wage
AED 333.33basic ÷ 30
Two-year cap
AED 240,000
First 5 years × 21 days
105 days
Remaining 2.5 years × 30 days
75 days
Gratuity before cap
AED 60,000.00
Gratuity payable
AED 60,000.00
Under Federal Decree-Law No. 33 of 2021, resigning no longer reduces the gratuity for service from 2 February 2022. Service before that date may follow the old rules.
UAE nationals are covered by the pensions and social security system instead. DIFC and ADGM employees have their own schemes; employers using the approved savings scheme pay contributions instead of gratuity.
This is an estimate based on published rates, not tax or financial advice. Your payslip or assessment may differ. We are an independent site, not affiliated with any government agency.
How gratuity is calculated
Daily wage = last basic monthly salary ÷ 30.
Days earned = 21 × years of service up to five, plus 30 × each year beyond five. Months and days of a partial year count pro rata once one full year has been completed.
Gratuity = days earned × daily wage.
Cap = two years of wage. In practice the cap only bites after roughly 26 years of service.
Unpaid absence is removed from the service period. Part-time employees receive the full-time gratuity multiplied by their share of full-time hours.
Worked example: 7 years 6 months on AED 10,000 basic
Basic salary AED 10,000, service 7 years 6 months
The daily wage is AED 333.33. The first five years earn 105 days and the next 2.5 years earn 75 days, a total of 180 days, so the gratuity is AED 60,000.
End-of-service gratuityAED 60,000paid within 14 days of termination
Days of wage earned
180 days
Daily basic wage
AED 333.33basic ÷ 30
Two-year cap
AED 240,000
First 5 years × 21 days
105 days
Remaining 2.5 years × 30 days
75 days
Gratuity before cap
AED 60,000.00
Gratuity payable
AED 60,000.00
What changed with the 2021 law
The old labour law reduced gratuity for employees who resigned from unlimited contracts (to one third after 1–3 years and two thirds after 3–5 years). Federal Decree-Law No. 33 of 2021, in force since 2 February 2022, moved all employees to fixed-term contracts and removed that reduction for service after that date. Employers may also join an approved savings scheme (Cabinet Resolution No. 96 of 2023) and pay monthly contributions instead of a lump-sum gratuity.
Tips
Check the basic salary in your contract. Many UAE packages keep the basic low and allowances high, which lowers the gratuity.
Keep your final settlement statement and compare it with the calculation before signing.
Complaints about unpaid gratuity can be filed with MOHRE through its app, website or call centre.
Questions people ask
How is gratuity calculated in the UAE?
21 days of basic wage for each of the first five years of service and 30 days for each year after that, with partial years counted pro rata. The total cannot exceed two years' wage.
Is gratuity based on basic salary or total salary?
On the last basic salary only. Housing, transport and other allowances are excluded.
Do I lose gratuity if I resign?
Not under the current law. Since 2 February 2022, the gratuity is the same whether you resign or your employer ends the contract, as long as you completed at least one year of continuous service.
When must gratuity be paid?
Within 14 days of the end of employment, together with outstanding wages and other entitlements.
Do unpaid leave days count?
No. Days of unpaid absence are deducted from the service period.
This is an estimate based on published rates, not tax or financial advice. Your payslip or assessment may differ. We are an independent site, not affiliated with any government agency. Read the full disclaimer.
