When you leave a job in the UAE after at least a year, you are usually owed an end-of-service gratuity – a lump sum based on your basic salary and length of service. This page gives you the concrete rule, a calculator to estimate your own amount, worked examples, and the details that change the result.
For the wider picture, see our guide to working in the UAE and the UAE labour card and the UAE employment visa cost.
Quick answer
Under the current UAE Labour Law (Federal Decree-Law No. 33 of 2021), a full-time employee with at least one year of continuous service is entitled to gratuity calculated on the last basic salary:
- 21 days of basic pay for each of the first 5 years of service;
- 30 days of basic pay for each year after 5 years;
- the total is capped at 2 years’ basic salary.
Under the current law this applies whether you resign or are terminated, as long as you have completed one full year. Allowances (housing, transport, etc.) are not counted – only basic salary.
Estimate your gratuity
Enter your last basic monthly salary and length of service to estimate your end-of-service pay. It is an estimate – your employer settles the exact figure.
How UAE gratuity is calculated
The formula works off your daily basic wage, which is your basic monthly salary divided by 30:
- Daily wage = basic monthly salary ÷ 30.
- First 5 years: 21 × daily wage × number of years (up to 5).
- Beyond 5 years: 30 × daily wage × each additional year.
- Add the two parts, then cap the total at 2 years’ basic salary (24 months).
Partial years are counted proportionally, so 6 years and 6 months of service is treated as 6.5 years.
Worked examples
The table below shows indicative gratuity for a few common cases. All figures use basic salary only.
| Basic salary | Service | Days accrued | Estimated gratuity |
| AED 5,000 | 3 years | 63 days | AED 10,500 |
| AED 10,000 | 5 years | 105 days | AED 35,000 |
| AED 10,000 | 8 years | 195 days | AED 65,000 |
| AED 15,000 | 10 years | 255 days | AED 127,500 |
What counts as “basic salary”
Gratuity is based on basic salary only – the base figure on your contract before add-ons. It excludes:
- housing allowance;
- transport allowance;
- utilities, furniture and similar allowances;
- commissions, bonuses and overtime.
This is why your gratuity is often much smaller than a calculation on your total (gross) package would suggest. If your contract splits a large share of pay into allowances, your basic salary – and your gratuity – will be lower.
Resignation vs termination
Under the old law, employees who resigned from an unlimited contract could lose part of their gratuity on a sliding scale. The current UAE Labour Law removed that: as long as you have completed one year of continuous service, the 21/30-day formula applies to both resignation and termination. Gratuity can still be forfeited in specific dismissal-for-cause situations defined by law.
The 2-year cap and unpaid leave
Two rules commonly reduce the headline number:
- Cap: total gratuity cannot exceed 2 years’ basic salary, no matter how long you served.
- Unpaid leave: days of unpaid leave are not counted as service, so long periods of unpaid leave reduce the years used in the calculation.
When is gratuity paid?
Employers must settle all end-of-service dues, including gratuity, within 14 days of the contract ending. If payment is delayed or disputed, the matter can be raised with the Ministry of Human Resources and Emiratisation (MOHRE).
Free zones: DIFC and ADGM are different
The formula above reflects the federal MOHRE rules that cover the mainland and most free zones. Two financial free zones run their own systems: DIFC uses the DEWS funded savings scheme (monthly employer contributions instead of an end-of-service lump sum), and ADGM has its own end-of-service framework. If you work in DIFC or ADGM, check your specific scheme rather than the federal formula.
Limited vs unlimited contracts: what changed
If you are researching gratuity you may see references to “limited” and “unlimited” contracts – that distinction is now largely historical. Under the previous law, employees on unlimited contracts who resigned received a reduced gratuity (a third of the amount for one to three years of service, two thirds for three to five years, and the full amount only after five years). The current law – Federal Decree-Law No. 33 of 2021, in force since February 2022 – moved all private-sector employees to fixed-term contracts and removed that resignation penalty: whether you resign or are terminated, you are entitled to the full 21 days’ basic pay per year for the first five years and 30 days per year thereafter, provided you have completed at least one year of continuous service. The calculator above uses this current formula. Gratuity can still be affected in cases of dismissal for a serious cause defined in the law, so if that applies to you, check your specific situation.
Need help with an employment or visa matter?
Leaving or changing jobs usually also involves visa cancellation, a new work permit, and Emirates ID steps. If your case is more than a gratuity question, Emirae can help you plan the next step through Visa and Residency.
FAQ
How is gratuity calculated in the UAE?
Gratuity is based on your last basic salary: 21 days of basic pay for each of the first 5 years of service, and 30 days for each year after that, capped at 2 years’ basic salary. You need at least 1 year of continuous service.
Is UAE gratuity calculated on basic salary or gross salary?
On basic salary only. Allowances such as housing, transport, utilities, commissions and overtime are excluded, so gratuity is usually smaller than a calculation on gross pay would suggest.
Do I get gratuity if I resign in the UAE?
Yes. Under the current UAE Labour Law, if you have completed at least one year of continuous service you receive the full 21/30-day gratuity whether you resign or are terminated.
What is the maximum gratuity in the UAE?
Total end-of-service gratuity is capped at 2 years’ basic salary, regardless of how many years you worked.
Do I get gratuity if I worked less than a year?
No. UAE law requires at least one full year of continuous service to qualify for end-of-service gratuity. Unpaid leave days are not counted as service.
When must gratuity be paid?
Employers must settle end-of-service dues, including gratuity, within 14 days of the contract ending. Delays can be raised with MOHRE.
Is gratuity different in DIFC or ADGM?
Yes. DIFC uses the DEWS funded savings scheme and ADGM has its own end-of-service framework, both different from the federal MOHRE formula. Check your specific scheme if you work in those free zones.
UAE Business Setup Specialist
Krystyna Sokolovska is a UAE business setup specialist who helps founders, independent professionals, and growing companies navigate business launch decisions in the Emirates with more clarity and less risk. Her work focuses on the practical side of entry into the UAE market — choosing the right setup path, understanding licensing options, preparing for banking, planning visa steps, and avoiding common mistakes that slow companies down.
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