Work out the end-of-service gratuity you’re owed when you leave a private-sector job in the UAE. Enter your basic salary and dates of employment to see the payout under the current Labour Law.
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How gratuity is calculated
- You need at least one year of continuous service.
- 21 days’ basic pay for each of the first five years.
- 30 days’ basic pay for each year after five.
- Part years count pro rata.
- The total can’t exceed two years’ wages.
Only basic salary counts, not housing, transport or other allowances. Daily wage is usually basic monthly pay × 12 ÷ 365. Under the current law (Federal Decree-Law 33 of 2021), resigning no longer reduces gratuity as it did under the old law.
Worked examples
7 years on AED 12,000 basic
Daily wage is AED 12,000 × 12 ÷ 365 = about AED 395. Five years at 21 days (105 days) plus two years at 30 days (60 days) is 165 days, so gratuity is about AED 65,100.
3 years on AED 8,000 basic
3 × 21 = 63 days at about AED 263 a day, so around AED 16,570.
Why basic salary matters
Two people on AED 20,000 a month can get very different gratuity. If one has a AED 10,000 basic and the other AED 14,000, the second gets 40% more, because allowances don’t count.
Frequently asked questions
How is gratuity calculated in the UAE?
21 days of basic pay for each of the first five years and 30 days for each year after, capped at two years’ wages, for at least one year of service.
Do I get gratuity if I resign?
Yes. Under the current Labour Law, gratuity is the same whether you resign or your employer ends the contract, as long as you’ve completed a year.
Are allowances included?
No. Gratuity is based on your last basic salary only.
Does this apply in free zones like DIFC?
Not always. DIFC and ADGM have their own employment laws and many DIFC employers pay into a savings scheme instead.
Sources
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