How UAE End-of-Service Gratuity Is Calculated

Updated 27 September 2026 · 5 min read

If you're a non-UAE national on a full-time private-sector contract, you're entitled to an end-of-service gratuity once you've completed a year of continuous service. The formula comes from Federal Decree-Law No. 33 of 2021, and it's simpler than most people expect. Here's how it works, with a worked example.

This is general information, not legal advice. Your contract, employer or free zone can change the picture, so check with MOHRE or a lawyer for your own case.

The rules in Article 51

Article 51 of the Decree-Law sets out the gratuity for foreign full-time workers:

• 21 days' basic wage for each of the first five years of service.
• 30 days' basic wage for each year after that.
• At least one year of continuous service before any gratuity is due.
• Part years count in proportion to the time worked, once you've completed that first year.
• Unpaid absence is left out: days away from work without pay don't count towards your length of service.
• Last basic wage: the calculation uses the last basic wage you received.
• A cap: the total can't exceed two years' wage.

The employer may deduct amounts due from you under the law or a court judgment. The law doesn't set a lower rate for people who resign, and UAE nationals are covered by the pensions and social security legislation instead of this formula.

Basic wage, not total salary

The Decree-Law defines basic wage as the wage in your employment contract, and says it does not include any other allowances or benefits in kind. Housing, transport, phone and similar allowances are left out. So if your package is AED 15,000 a month but your contract shows a basic of AED 8,000, gratuity is worked out on AED 8,000.

That's why the split between basic salary and allowances in your offer matters so much. Check the figure in your contract rather than the total on your payslip.

A worked example

Working out the daily wage

Gratuity is counted in days, so you need a daily figure. The Decree-Law doesn't spell out a single way to turn a monthly wage into a daily one, and you'll see two methods in practice:

• Calendar-year method: basic monthly wage × 12 ÷ 365. For AED 8,000, that's AED 263.01 a day.
• 30-day method: basic monthly wage ÷ 30. For AED 8,000, that's AED 266.67 a day.

The difference is only about 1.4%, but it's the most common reason two calculators give slightly different answers. If your employer's figure doesn't match yours, ask which method they used.

The calculation step by step

Take an employee whose last basic wage is AED 8,000 a month, with 7 years and 6 months of continuous service and no unpaid leave.

1. First five years: 5 × 21 = 105 days.
2. Remaining 2.5 years: 2.5 × 30 = 75 days.
3. Total: 180 days of basic wage.
4. Daily wage: AED 8,000 × 12 ÷ 365 = AED 263.01.
5. Gratuity: 180 × 263.01 = about AED 47,342. With the 30-day method it would be 180 × 266.67 = AED 48,000.
6. Cap check: two years' wage is 24 × 8,000 = AED 192,000, so the cap doesn't apply.

If the same person had taken 30 days of unpaid leave, their service would be 30 days shorter. That trims about 2.5 days' wage from the 30-day portion, or roughly AED 650.

Part years work the same way. Someone leaving after 1 year and 3 months gets 1.25 × 21 = 26.25 days, about AED 6,904 on the same basic. Someone leaving after 11 months gets no gratuity.

The two-year cap only matters after a long career. At 105 days for the first five years and 30 days a year after that, you reach two years' wage after roughly 25 to 26 years of service.

When it must be paid

Article 53 says the employer must pay your wages and all other entitlements within 14 days of the end of the contract, and that includes gratuity. MOHRE's Q&A on the law says that if the employer doesn't pay within 14 days, the employee can submit a labour complaint.

Before your last day, ask HR for a written breakdown showing the basic wage used, your service dates, any unpaid days and any deductions. It's much easier to sort out a mistake before the final settlement is signed.

Free zones, government jobs and other schemes

• DIFC: the Dubai International Financial Centre has its own employment law. In February 2020 it launched the DIFC Employee Workplace Savings (DEWS) scheme, which replaced the traditional gratuity with a funded savings plan.
• ADGM: Abu Dhabi Global Market has its own Employment Regulations, with gratuity due after at least one year of continuous service. The ADGM Employment Affairs Office is the place to check the details.
• Federal government: expatriates in ministries and federal entities follow a different scale based on months of basic salary, described on the UAE government portal.
• Private-sector savings scheme: employers can choose to join MOHRE's voluntary alternative end-of-service benefits scheme, where benefits are invested in approved funds. Entitlements built up before joining are preserved.
• Part-time contracts: the Executive Regulation scales the gratuity by your contracted hours compared with a full-time contract.

If you work in another free zone, confirm which law your contract falls under before relying on the formula above.

Estimating yours with our Gratuity Calculator

Our Gratuity Calculator estimates private-sector gratuity from your basic monthly salary and your service dates, based on the rules above.

1. Enter your basic monthly salary from your contract, not your total package.
2. Enter your start date and your last working day.
3. If you took unpaid leave, move your start date later by that number of days so the service period matches.
4. Compare the result with the figure in your final settlement.

Treat the result as an estimate. It uses the 30-day method (basic ÷ 30) and applies the two-year cap, but it doesn't know about deductions, unpaid leave or DIFC and ADGM schemes, and your employer may use the calendar-year method. If you want to see your salary as weekly, daily or hourly figures for other purposes, the Salary Calculator does that, but remember that gratuity uses basic wage only.

Frequently asked questions

Is gratuity calculated on basic salary or total salary?

On your last basic wage. Allowances such as housing and transport are excluded under the law's definition of basic wage.

Do I get gratuity if I leave before one year?

No. Gratuity is only due after one year of continuous service. After that, part years count in proportion to the time worked.

Does unpaid leave reduce my gratuity?

Yes, slightly. Days of absence without pay aren't counted in your length of service.

How long does my employer have to pay?

14 days from the end of the contract, under Article 53. If payment is late, you can raise a labour complaint with MOHRE.