How is end-of-service gratuity calculated in the UAE?
Article 51 of the UAE Labour Law says that a full-time worker who has completed at least one year of continuous service is owed an end-of-service gratuity, calculated on the last basic wage:
- 21 days of basic wage for each of the first five years, and
- 30 days of basic wage for each year after that.
Parts of a year are paid in proportion to the time worked. Days of unpaid absence are not counted. The total cannot be more than two years’ wage. The calculation has three steps:
- Daily wage: monthly basic salary ÷ 30.
- First five years: daily wage × 21 × years (up to 5). After year five: daily wage × 30 × the extra years.
- Add the two parts. If the total is more than 24 months of basic salary, the gratuity is 24 months of basic salary.
What you receive, by length of service
| Length of service | Gratuity |
|---|---|
| Less than 1 year | Nothing |
| 1 to 5 years | 21 days of basic wage for each year |
| More than 5 years | 21 days for each of the first 5 years, and 30 days for each year after |
| Any length | No more than 2 years of wage in total |
Under the current law, the reason the job ended does not reduce the gratuity. Resigning after one year or more gives the same gratuity as a contract that ends or is ended by the employer.
Worked examples
10 years of service, basic salary 10,000 AED
Daily wage: 10,000 ÷ 30 = 333.33 AED. First five years: 5 × 21 × 333.33 = 35,000 AED. Next five years: 5 × 30 × 333.33 = 50,000 AED. You receive 85,000 AED.
3½ years of service, basic salary 6,000 AED
Daily wage: 6,000 ÷ 30 = 200 AED. 3.5 × 21 × 200 = 14,700 AED.
30 years of service, basic salary 5,000 AED
Daily wage: 166.67 AED. First five years: 17,500 AED. The next 25 years: 25 × 30 × 166.67 = 125,000 AED. The total of 142,500 AED is above the limit of two years’ wage (24 × 5,000 = 120,000 AED), so you receive 120,000 AED.
Which salary is used?
The UAE gratuity uses your last basic wage, as written in your contract. Housing, transport, phone and other allowances are not included, and neither are overtime, commissions or bonuses. This is different from Saudi Arabia, where fixed allowances are included.
Frequently asked questions
Do I lose my gratuity if I resign?
No. Since the new Labour Law came into force on 2 February 2022, a worker who resigns after at least one year of continuous service receives the full gratuity. The old reductions for resignation no longer apply.
I worked less than one year. Do I get anything?
No. The gratuity starts after one full year of continuous service. After that, every part of a year is counted.
When must my employer pay?
Within 14 days of the end of the employment, together with any other money you are owed (Article 53).
Why does the calculator divide the salary by 30?
Most employers and the Ministry’s examples work out the daily wage as the monthly basic salary divided by 30. Some use salary × 12 ÷ 365 instead, which gives a slightly lower result. Check your contract if the difference matters.
Can my employer deduct money from my gratuity?
Your employer may deduct amounts you owe them, such as an unpaid loan (Article 52). Damages for misconduct need a court decision before they can be taken from the gratuity.
Does this apply in free zones such as DIFC or ADGM, or to domestic workers?
No. DIFC and ADGM have their own employment laws, many DIFC workers are in a savings scheme instead, and domestic workers are covered by a separate law. Government employees have their own pension rules.
Where can I complain if I am not paid?
You can file a labour complaint with the Ministry of Human Resources and Emiratisation (MOHRE) through its website or app, or call 600590000. Keep your contract, salary slips and this statement.
Last reviewed: October 2026, based on Federal Decree-Law No. 33 of 2021 published on the UAE legislation portal. The result is an estimate for planning and is not legal advice. For your specific case, contact the Ministry of Human Resources and Emiratisation.
This page was translated from Arabic. If something is unclear or wrong, please tell us.