How UAE gratuity is calculated
Under Article 51 of Federal Decree-Law No. 33 of 2021, private-sector employees with at least one year of continuous service earn end-of-service gratuity based on their last basic salary.
Daily wage = basic salary ÷ 30 Years 1 to 5: daily wage × 21 days × years Year 6 onward: daily wage × 30 days × years Maximum: 2 years of basic salaryPartial years count pro rata once you pass the first year. Days of unpaid absence are deducted from your service.
Worked example
AED 10,000 basic salary and exactly 8 years of service: daily wage AED 333.33. The first 5 years give 5 × 21 × 333.33 = AED 35,000. Years 6 to 8 give 3 × 30 × 333.33 = AED 30,000. Total AED 65,000.
| Service | AED 5,000 basic | AED 10,000 basic | AED 20,000 basic |
|---|---|---|---|
| 1 year | 3,500 | 7,000 | 14,000 |
| 3 years | 10,500 | 21,000 | 42,000 |
| 5 years | 17,500 | 35,000 | 70,000 |
| 10 years | 42,500 | 85,000 | 170,000 |
| 20 years | 92,500 | 185,000 | 370,000 |
Questions
Do I lose gratuity if I resign?
No. The old reductions for resigning were removed when the new Labour Law took effect in February 2022. Resignation and termination give the same gratuity.
Is gratuity calculated on basic or total salary?
On your last basic salary only. Housing, transport and other allowances, commission and overtime are excluded.
When must my employer pay?
Within 14 days of the end of your contract. If it is not paid you can complain to MOHRE free of charge.
Does this apply in DIFC or ADGM?
No. DIFC uses the DEWS savings scheme and ADGM has its own employment regulations. UAE nationals in the private sector are covered by the pension system instead.
Sources: UAE Legislation portal (Decree-Law 33 of 2021) · MOHRE