.svg)
.svg)
How gratuity is calculated in the UAE
End-of-service gratuity is the lump sum a private-sector employer must pay you when your employment ends, provided you have completed at least one year of continuous service. It is set out in Article 51 of Federal Decree-Law No. 33 of 2021, the law that replaced the old 1980 Labour Law in February 2022. The rule is simple once you know the two numbers that drive it: your basic wage, and how long you worked.
For each of your first five years you earn 21 days of basic wage. For every year after the fifth you earn 30 days of basic wage. Part-years count too, in proportion to the time you actually worked, so someone leaving after three years and seven months is paid for exactly that. The only ceiling is that the total cannot exceed two years of your basic wage, which only becomes relevant for very long-serving staff.
Basic wage, not total salary
This is the detail that catches most people out. Gratuity is calculated on your basic wage only, which is the figure written as "basic" on your contract and payslip. Housing, transport, phone and other allowances are excluded. If your total package is AED 10,000 but your basic is AED 6,000, the calculation runs on AED 6,000. Employers sometimes structure contracts with a low basic for exactly this reason, so it is worth checking your own before you plan around a number. The daily rate used in the calculation is your monthly basic divided by 30, which is the convention MoHRE uses.
Resignation, termination and probation
Under the 2021 law it no longer matters who ends the contract. Whether you resign or are let go, the entitlement is the same, and the old rule that reduced gratuity for employees who resigned from a limited contract has gone. Days of unpaid leave are not counted as service, so a long stretch of unpaid absence reduces the final figure slightly. If you leave during probation, or before completing a full year for any reason, no gratuity is due. Gratuity is also separate from your other end-of-service entitlements: unused annual leave is paid on top, at basic wage, and any notice pay or pay in lieu is calculated on your full wage.
When and how it must be paid
Your employer must settle all end-of-service dues, including gratuity, within 14 days of your last working day. If it is late, short, or calculated on the wrong wage, the first step is a complaint through MoHRE, which is free and usually resolves the matter without going to court. Keep your contract, your last three payslips and your visa cancellation paperwork; those three documents settle most disputes. Some employers in free zones such as DIFC and ADGM run a different, savings-based scheme instead of gratuity, so if you work in one of those, check your own zone's rules rather than relying on this calculator.