HR and payroll in the Gulf

How is end-of-service gratuity calculated in the UAE?

By Mahmoud SaiedLast updated 27 October 20262 min read

The short answer

Under Article 51 of Federal Decree-Law No. 33 of 2021, gratuity is 21 days' basic salary for each of the first five years and 30 days for each year after. It is due after one year of continuous service and is capped at two years of wages. Under the current law the gratuity is not reduced on resignation.

Step by step

  1. 1

    Confirm eligibility

    The gratuity is due after at least one year of continuous service, and unpaid leave days are excluded from the period.

  2. 2

    Work out the daily wage

    Monthly basic salary ÷ 30, since allowances are not included in the calculation.

  3. 3

    The first five years

    21 days × the daily wage for each year, with part years counted pro rata.

  4. 4

    After five years

    30 days × the daily wage for each additional year.

  5. 5

    Apply the cap

    The total gratuity cannot exceed two years of wages, that is basic salary × 24.

A common mistake

Calculating the gratuity on gross salary instead of basic salary is a common mistake that inflates the amount considerably, so check what the contract defines as basic salary.

People also search for this question as
  • uae gratuity calculation after resignation
  • uae new labor law end of service gratuity