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Guide

UAE Gratuity Calculation — End-of-Service Benefits Explained

The formula in Federal Decree-Law 33 of 2021, what counts as basic salary, and examples for 3, 7 and 12 years of service.

Rebota Team · 6 min read · Updated 25 Sep 2026

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Years 1–5

21 days' basic per year

Year 6 onward

30 days' basic per year

Cap

2 years' total wage

Key Takeaways

Gratuity is paid on basic salary only — allowances are excluded.
21 days per year for the first five years, 30 days for each year after.
At least one year of continuous service is required.
Under the 2021 law, resignation no longer reduces gratuity.

The formula

Daily basic = Monthly basic × 12 ÷ 365

Gratuity = Daily basic × (21 × years up to 5 + 30 × years beyond 5), capped at two years' wage. Part years are counted pro-rata.

Worked examples

Basic AED 10,000, 3 years: 328.77 × 63 = AED 20,712
Basic AED 10,000, 7 years: 328.77 × (105 + 60) = AED 54,247
Basic AED 12,000, 6 years: 394.52 × 135 = AED 53,260

Open the UAE Gratuity Calculator →

Resignation and termination

Since February 2022 gratuity is paid in full after one year whether you resign or are terminated, unless dismissed for gross misconduct under Article 44. It must be paid within 14 days of the contract ending.

Free zones and DEWS

DIFC uses the DEWS savings plan instead of gratuity; ADGM has its own rules. Some employers now offer voluntary savings schemes approved by MoHRE as an alternative.

Action Checklist

Check basic salary on your contract, not total pay
Count continuous service including part years
Deduct unpaid leave days
Verify with the UAE gratuity calculator

Related Intelligence

Frequently Asked Questions

Is gratuity calculated on basic or gross salary?▾

On basic salary only; housing, transport and other allowances are excluded.

Do I get gratuity if I resign before 5 years?▾

Yes, under the current law resignation after one year gives full gratuity.

Is unpaid leave counted?▾

No. Days of unpaid absence are excluded from the service period.

Is there tax on gratuity in the UAE?▾

No. There is no personal income tax in the UAE.

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