Key takeaways
- Private-sector employees with at least one year of continuous service are entitled to gratuity.
- It is 21 days of basic pay per year for the first five years and 30 days per year after that.
- Gratuity is based on the last basic salary only and capped at two years’ pay.
- Under the current law, resigning does not reduce gratuity.
On this page
General information about Federal Decree-Law No. 33 of 2021 for expatriate employees in the mainland private sector (UAE nationals are covered by the pensions and social security law instead). DIFC and ADGM have their own employment laws, and contracts may give more generous terms. Confirm amounts with your employer, MOHRE or a lawyer.
The formula
Article 51 of the UAE Labour Law sets the end-of-service gratuity for full-time employees who complete at least one year of continuous service:
- 21 days' basic wage for each of the first five years;
- 30 days' basic wage for each year after five;
- parts of a year count in proportion to the time worked;
- for part-time employees, the amount is scaled to the hours worked;
- the total cannot exceed two years' wage.
The daily wage is generally calculated as the basic monthly salary divided by 30. Allowances such as housing, transport and phone are not included unless the contract says so.
Worked examples
| Basic salary | Service | Calculation | Gratuity |
|---|---|---|---|
| AED 6,000 | 3 years | 200 × 21 × 3 | AED 12,600 |
| AED 10,000 | 5 years | 333.33 × 21 × 5 | AED 35,000 |
| AED 12,000 | 8 years | 400 × (21 × 5 + 30 × 3) | AED 78,000 |
| AED 8,000 | 10 months | Less than one year | Not entitled |
Use the UAE gratuity calculator to work it out from your exact start and end dates, including unpaid leave.
Common questions
Does resigning reduce my gratuity?
Not under the current law. The old rules reduced gratuity for employees on unlimited contracts who resigned within five years; since February 2022, the same calculation applies whether you resign or are dismissed, except in specific cases set out in the law.
Does unpaid leave count?
No. Days of unpaid absence are deducted from the period of service.
When must it be paid?
Employers must pay end-of-service dues within 14 days of the end of employment.
What about the savings scheme?
Since 2023, employers may join an approved alternative end-of-service savings scheme, in which contributions are invested for employees. Employers contribute a percentage of basic salary each month (5.83% for the first five years of service and 8.33% after that, under the basic plan). If your employer has enrolled you, your entitlement follows the scheme's rules instead of this formula for the covered period.
Sources
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