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

If you are a foreign full-time worker in the UAE private sector and you leave a job after at least a year, your employer owes you end of service gratuity. The amount is set by Article 51 of Federal Decree-Law No. 33 of 2021, so you can work it out yourself before you talk to HR.

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

Your daily rate is your monthly basic salary divided by 30. Multiply the days by the daily rate and you have your gratuity. The total cannot be more than 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

Gratuity is due to a foreign full-time worker who has completed one or more years of continuous service (Article 51, clause 2). If you leave before completing a year, you get no gratuity.

2. Use basic salary only

The law says gratuity is calculated on the basic wage, and specifically the last basic wage you received (clauses 2 and 5). Housing, transport, phone and similar allowances are not part of it, and neither are bonuses or commission. This is the most common reason people expect a bigger figure than they receive. See basic salary vs total salary.

3. Work out your daily rate

Divide your monthly basic salary by 30. The law speaks of “the wage of 21 days” without spelling out the conversion, and dividing a monthly wage by 30 is the usual method. On a basic salary of AED 5,000, the daily rate is 5,000 ÷ 30 = AED 166.67.

4. Count your days

Multiply your years of service by 21 for the first five years and 30 for each year after that. If you have worked 3 years, that is 3 × 21 = 63 days. If you have worked 8 years, it is 5 × 21 + 3 × 30 = 105 + 90 = 195 days.

Part of a year counts too. Once you have completed a year, you are entitled to gratuity for parts of a year in proportion to the time you worked (clause 3). So 3 years and 6 months is 3.5 years.

5. Multiply, then apply the cap

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

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 are not included when counting your service (clause 4). If you took 60 days of unpaid leave over your employment, subtract those days from your total before calculating.

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 your notice.

Who this applies to

• Foreign full-time workers: the formula above.
• UAE nationals: they receive end of service benefits through the pension and social security system instead (clause 1).
• Part-time and job-sharing workers: the amount is scaled by the share of full-time hours you work under your contract (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?

Article 51 sets one formula for foreign full-time workers when their service ends and makes no reduction for resigning. Even dismissal as a disciplinary sanction is described in Article 39 as keeping the worker’s right to end of service gratuity.

When you should be paid, and what can be deducted

Your employer must pay your wages and all other entitlements, gratuity included, within 14 days of the end of the contract (Article 53).

The employer may deduct from your gratuity 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.
• Expecting more than the cap. Long-serving staff on a low basic salary often hit it.
• Stopping at your resignation date. Count through your notice period.

Check your own figure

Use the UAE gratuity calculator to enter your dates and basic salary. It shows the days, the daily rate and whether the cap applied, so you can compare it with your final settlement.

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

We checked these provisions against the official English text on 1 October 2026. This is general information, not legal advice. If your figure looks wrong, ask your employer for the calculation in writing and contact MOHRE if you cannot resolve it.