How UAE End of Service Gratuity Is Calculated (With Examples)

Foreign full-time workers in the UAE private sector who leave after at least a year are owed gratuity. Article 51 of Federal Decree-Law No. 33 of 2021 sets the amount, so you can work it out yourself.

The short answer

For each year of service you earn a number of days of basic pay:

• 21 days of basic pay for each of your first 5 years
• 30 days of basic pay for each year after the fifth

Daily rate = monthly basic salary ÷ 30. Gratuity = days × daily rate, up to a maximum of two years’ wage.

Formula: gratuity = (21 × years up to 5 + 30 × years beyond 5) × (basic monthly salary ÷ 30)

Step by step

1. Check you qualify

You need one or more years of continuous service (Article 51, clause 2). Under a year, there is no gratuity.

2. Use basic salary only

Gratuity uses the last basic wage you received (clauses 2 and 5). Housing, transport, phone and similar allowances do not count, nor do bonuses or commission. This is the most common reason people expect more than they get. See basic salary vs total salary.

3. Work out your daily rate

Divide your monthly basic salary by 30. The law says “the wage of 21 days” but does not say how to convert; dividing by 30 is the usual method, not a rule in the text. On AED 5,000 basic, the daily rate is 5,000 ÷ 30 = AED 166.67.

4. Count your days

21 days for each of the first five years, 30 days for each year after that (see the examples below).

Once you have completed a year, parts of a year count in proportion (clause 3). So 3 years and 6 months is 3.5 years.

5. Multiply, then apply the cap

The total cannot exceed two years’ wage (clause 6). We apply that as 24 months of basic salary. If your result is higher, you get the capped figure.

Worked examples

Example 1: 3 years, basic AED 5,000

• Daily rate: 5,000 ÷ 30 = AED 166.67
• Days: 3 × 21 = 63
• Gratuity: 63 × 166.67 = AED 10,500

Example 2: 8 years, basic AED 10,000

• Daily rate: 10,000 ÷ 30 = AED 333.33
• Days: (5 × 21) + (3 × 30) = 195
• Gratuity: 195 × 333.33 = AED 65,000

Example 3: 30 years, basic AED 3,000 (the cap applies)

• Daily rate: 3,000 ÷ 30 = AED 100
• Days: (5 × 21) + (25 × 30) = 855, worth AED 85,500
• Cap: 24 × 3,000 = AED 72,000
• Gratuity: AED 72,000

For more salary and service combinations, see the gratuity table by salary and years.

What counts as service

Days of absence from work without pay do not count (clause 4). If you took 60 days of unpaid leave, subtract them from your total.

Your contract stays in force during your notice period (Article 43), so service runs until the notice period ends, not the day you hand in notice.

Who this applies to

• Foreign full-time workers: the formula above.
• UAE nationals: end of service benefits come through the pension and social security system instead (clause 1).
• Part-time and job-sharing workers: the amount is scaled by your share of full-time hours (Executive Regulations, Article 30).
• Temporary workers or anyone with under a year of service: no gratuity under these rules (Executive Regulations, Article 30).

Does resigning reduce it?

No. Article 51 makes no reduction for resigning. Article 39 says even dismissal as a disciplinary sanction keeps the right to gratuity.

When you should be paid, and what can be deducted

Wages and all other entitlements, gratuity included, are due within 14 days of the end of the contract (Article 53).

The employer may deduct only amounts due under the law or a court judgment (clause 7). The Executive Regulations (Article 29) list them: loans or amounts paid to you in excess of your entitlement, pension and insurance contributions you owe, penalties under the establishment’s approved penalty list, court debts, and damage you caused through your own mistake or by ignoring your employer’s instructions.

Common mistakes

• Using total salary. Only basic salary counts.
• Forgetting unpaid leave. It shortens your counted service.
• Forgetting the cap after very long service. At 24 months of basic salary, the cap applies only after about 25½ years of service, whatever the salary.
• Stopping at your resignation date. Count through your notice period.

Check your own figure

Enter your dates and basic salary in the UAE gratuity calculator. It shows the days, the daily rate and whether the cap applied, to compare with your final settlement. If your figure looks wrong, ask your employer for the calculation in writing and contact MOHRE if you cannot resolve it.

Sources

• Federal Decree-Law No. 33 of 2021 Regulating Labour Relations: Articles 39, 43, 51 and 53
• Cabinet Resolution No. 1 of 2022 (Executive Regulations): Articles 29 and 30
• The 2024 amendment (Decree-Law No. 9 of 2024) changed Articles 54 and 60 only

Checked against the official English text on 1 October 2026.