What is gratuity in the UAE?
Gratuity is a lump sum that your employer pays you when your job ends. It is also called end of service benefits, end of service gratuity or EOSB. It is not a gift and it is not a bonus. It is a legal right for foreign workers in the UAE private sector who finish at least one year of continuous service.
Most expat workers in the UAE do not pay into a national pension, so gratuity works as savings that build up while you work. The longer you stay with one employer, the bigger it becomes. This gratuity calculator UAE tool gives you that number quickly.
Gratuity is only one part of what you receive when you leave. Your full exit payment also includes salary for days worked, unused leave and sometimes notice pay. To see all of these together, use our UAE Final Settlement Calculator.
Who is eligible for gratuity?
Under the current UAE Labour Law, you are entitled to end of service gratuity if all of the following are true:
- You are a foreign (non-UAE national) employee.
- You work for a private sector employer that falls under Federal Decree-Law No. 33 of 2021. This covers the mainland and most free zones.
- You have completed at least one full year of continuous service with that employer.
- Your employment has ended, whether by resignation, termination, end of a fixed-term contract or mutual agreement.
If you have worked for less than one year, the law does not give you any gratuity. This rule is strict. Even if you leave one day before your first anniversary, the legal gratuity is zero. Your employer can still choose to pay something if your contract or company policy allows it, but it is not required by law.
UAE nationals are treated differently. Their end of service rights come from the pension and social security laws, not from the gratuity formula. GCC nationals working in the UAE may also fall under their own home country pension rules. This calculator is for expat workers only.
Does probation count toward the one year?
Yes. Your probation period is part of your service. Service runs from your joining date to your last working day, minus any unpaid absence.
The legal basis: Article 51 of Federal Decree-Law No. 33 of 2021
The main UAE labour law is Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relations. It came into force on 2 February 2022 and replaced the old Federal Law No. 8 of 1980. Gratuity rules are in Article 51. In August 2024, Federal Decree-Law No. 9 of 2024 amended some parts of the law, mainly about labour disputes and penalties. The gratuity formula itself did not change.
Here is what Article 51 says, in plain words:
- Basic wage only. Gratuity is calculated on your basic wage, not your total package.
- 21 days per year of basic wage for each of the first five years of service.
- 30 days per year of basic wage for each year after the first five years.
- Part years count. Once you pass one year, fractions of a year are paid in proportion to the time you worked.
- Unpaid absence is excluded. Days you were absent without pay are not counted as service.
- Last wage is used. The calculation uses the last basic wage you were entitled to. For piece-rate workers, the average daily wage is used.
- Cap of two years. The total gratuity cannot be more than two years of wages.
- Deductions. The employer may deduct amounts you owe it under the law or a court order.
Article 53 then says that wages and all end of service dues must be paid within 14 days from the date the contract ends. Article 51 also allows the Cabinet to approve other systems in place of gratuity. That is the legal basis for the new optional savings scheme explained further below.
The law does not spell out the daily wage formula. In practice, the Ministry of Human Resources and Emiratisation (MOHRE), employers and courts use basic monthly salary divided by 30. Our calculator uses this method too.
How to calculate gratuity in UAE: the step-by-step formula
You can do the calculation by hand in five steps. The calculator above follows exactly the same steps.
Step 1: Work out your daily basic wage
For a basic salary of AED 6,000, the daily wage is AED 200.
Step 2: Work out your length of service
Count from your joining date to your last working day. Count full years first, then the extra days. Then subtract any unpaid leave days.
If the result is less than 1, stop here. There is no legal gratuity.
Step 3: Gratuity for the first five years
Step 4: Gratuity for years after five
Step 5: Add and apply the cap
Maximum = Basic monthly salary × 24
If Part A plus Part B is higher than 24 months of basic salary, you receive the capped amount instead.
One small note on counting. Our tool counts your last working day as a working day. So 1 March 2021 to 28 February 2024 counts as exactly three years. Some HR systems count days in a slightly different way, so a small difference of a few dirhams is normal.
Worked examples
Each example below uses the same method as the calculator. You can type the same figures above and get the same result.
Example 1: Three years of service
Ravi joined a trading company in Dubai on 1 March 2021. His last working day was 28 February 2024. His basic salary is AED 5,000. He took no unpaid leave.
- Daily wage: 5,000 ÷ 30 = AED 166.67
- Service: exactly 3 years
- Gratuity: 166.67 × 21 × 3 = AED 10,500.00
Ravi resigned. Under the old law he would have received only one third of this amount. Under the current law, he receives the full AED 10,500.
Example 2: Ten years of service
Maria worked as a nurse in a private clinic from 1 January 2016 to 31 December 2025. Her last basic salary was AED 8,000.
- Daily wage: 8,000 ÷ 30 = AED 266.67
- First 5 years: 266.67 × 21 × 5 = AED 28,000.00
- Next 5 years: 266.67 × 30 × 5 = AED 40,000.00
- Total gratuity: AED 68,000.00
Notice that the second five years are worth much more than the first five. This is why many workers choose to stay a little longer once they pass the five-year point.
Example 3: Seven and a half years with unpaid leave
Imran joined a construction firm in Abu Dhabi on 1 April 2018. His last day was 30 September 2025. His basic salary is AED 10,000. He took 30 days of unpaid leave in 2020 to look after a family member.
- Daily wage: 10,000 ÷ 30 = AED 333.33
- Service: 7 full years and 183 extra days. After removing 30 unpaid days, 153 extra days remain. 153 ÷ 365 = 0.4192, so service is 7.4192 years.
- First 5 years: 333.33 × 21 × 5 = AED 35,000.00
- Remaining 2.4192 years: 333.33 × 30 × 2.4192 = AED 24,191.78
- Total gratuity: AED 59,191.78
Example 4: Less than one year
Joy joined a restaurant on 1 June 2025 and resigned with a last day of 30 April 2026. Her basic salary is AED 4,000. Her service is 11 months, so she is not entitled to gratuity. The calculator shows AED 0.00 and explains why. She should still receive her salary, leave balance and other dues.
Example 5: When the cap applies
A senior manager worked for the same company from 1 January 2000 to 31 December 2025, which is 26 years. His basic salary is AED 20,000.
- Daily wage: AED 666.67
- First 5 years: 666.67 × 21 × 5 = AED 70,000.00
- Next 21 years: 666.67 × 30 × 21 = AED 420,000.00
- Before the cap: AED 490,000.00
- Cap: 20,000 × 24 = AED 480,000.00
- Final gratuity: AED 480,000.00
The cap only matters for people with very long service. With the 21/30 day rates, you reach the cap after about 25 years and 8 months.
Gratuity days by length of service
This table shows the total days of basic wage you earn at different points. Multiply the number of days by your daily wage to get your gratuity.
| Completed service | Total days of basic wage | Example at AED 6,000 basic (AED 200/day) |
|---|---|---|
| Less than 1 year | 0 | AED 0 |
| 1 year | 21 | AED 4,200 |
| 2 years | 42 | AED 8,400 |
| 3 years | 63 | AED 12,600 |
| 5 years | 105 | AED 21,000 |
| 7 years | 165 | AED 33,000 |
| 10 years | 255 | AED 51,000 |
| 15 years | 405 | AED 81,000 |
| 20 years | 555 | AED 111,000 |
| Cap (any length) | 720 (24 months) | AED 144,000 |
Special cases
Resignation vs termination
This is one of the biggest changes in the current law. Under the old Federal Law No. 8 of 1980, people who resigned from an unlimited contract got only one third of their gratuity after one to three years, and two thirds after three to five years. People who resigned early from a limited contract could lose it completely.
Federal Decree-Law No. 33 of 2021 removed these reductions. Today, if you resign after one year or more, you receive the full gratuity, the same as if your employer ended the contract. You must still follow the notice rules in your contract. You can plan your exit date with our UAE Notice Period Calculator.
Dismissal for serious misconduct
Article 44 lets an employer dismiss a worker without notice for serious reasons, such as fraud or a serious safety breach. The old law said such workers lost their gratuity. The current law handles this differently and many cases end up depending on the facts. If you were dismissed under Article 44, get advice from MOHRE or a labour lawyer before you accept any settlement.
Part-time and flexible work
The law now recognises part-time, temporary and flexible work. Article 30 of Cabinet Resolution No. 1 of 2022 explains how gratuity works for part-time staff. You work out the share of full-time hours that you actually work, then apply that percentage to the full-time gratuity.
So if you work half the normal hours, you get roughly half of the full-time gratuity for that period. Temporary workers whose job lasts less than one year get no gratuity.
Unpaid leave and absence
Only unpaid absence is removed from your service. Paid annual leave, paid sick leave, public holidays and maternity leave with pay all count as service. If you took a long unpaid break, ask HR for the exact number of unpaid days in your file, then enter it in the calculator.
Salary changes during your service
The law uses your last basic wage. If you started at AED 3,000 and finished at AED 5,000, your whole gratuity is based on AED 5,000. A pay rise near the end of your service increases the gratuity for every year you worked.
Free zones, DIFC and ADGM
Most UAE free zones, such as JAFZA or DMCC, follow the federal labour law for gratuity. Two financial free zones are different:
- DIFC (Dubai International Financial Centre) replaced gratuity with the DIFC Employee Workplace Savings plan (DEWS) from 1 February 2020. Employers pay monthly contributions into a fund, at 5.83% of basic salary for the first five years and 8.33% after that. You receive the fund balance, not a gratuity lump sum.
- ADGM (Abu Dhabi Global Market) has its own Employment Regulations. It has its own gratuity and pension rules. Check with your HR team or the ADGM authority.
Our calculator does not apply DIFC or ADGM rules.
Government employees
People who work for federal or local government bodies usually fall under separate HR laws, not the private sector labour law. Their end of service rights can be very different. Check your own HR policy.
Domestic workers
Housemaids, drivers, nannies and other domestic workers are covered by Federal Decree-Law No. 9 of 2022 on Domestic Workers, not by Decree-Law 33. The older domestic worker law (Federal Law No. 10 of 2017) gave 14 days of basic wage per year. The 2022 law repealed it and said end of service rules would be set by a Cabinet decision. Lawyers disagree on how this applies today, so domestic workers should check with MOHRE before relying on any figure. This calculator is not designed for them.
The new end of service savings scheme
In October 2023 the UAE Cabinet issued Cabinet Resolution No. 96 of 2023. It created an optional alternative to the traditional gratuity, often called the voluntary end of service benefits savings scheme. MOHRE published further guidance in November 2025, and the scheme is running in 2026.
Here is how it works:
- It is voluntary for employers. Your company decides whether to join and which staff to include.
- The employer pays monthly contributions into an approved investment fund: 5.83% of basic salary for workers with under five years of service, and 8.33% for those with more than five years.
- Contributions must be paid within the first 15 days of each month.
- Gratuity you earned before your employer joined must still be settled under the normal law.
- You may add your own voluntary savings, up to 25% of your total wage.
- You can choose between capital-guaranteed, risk-based and Sharia-compliant options.
- When your job ends, you receive your balance plus any investment returns.
5.83% of monthly salary over 12 months equals about 21 days of pay per year, and 8.33% equals about 30 days. So the scheme roughly matches normal gratuity, plus any investment growth. If you are enrolled, your payout depends on the fund, so this calculator only gives a comparison.
Common mistakes when calculating end of service benefits UAE
- Using total salary. The legal formula uses basic salary. Using your gross package will give a figure that is far too high.
- Dividing by 365 or 26 instead of 30. The usual daily wage is monthly basic divided by 30.
- Forgetting the five-year switch. Years six onwards are paid at 30 days, not 21.
- Assuming resignation cuts gratuity. This was true under the old law. It is not true now.
- Ignoring unpaid leave. Long unpaid breaks reduce your service. Check your records.
- Rounding down part years. After one year, every extra day counts. You should not lose the last few months.
- Mixing up free zone rules. If you are in DIFC or ADGM, the federal formula does not apply.
What to do if your gratuity is not paid
Your employer must pay your gratuity and other dues within 14 days of the end of your contract. If this does not happen, follow these steps:
- Ask in writing. Send a polite email to HR asking for your final settlement statement and the payment date. Keep a copy.
- Check the figures. Compare the statement with this calculator and our final settlement calculator. Note any differences.
- File a complaint with MOHRE. You can do this through the MOHRE app, the MOHRE website or the MOHRE call centre. You will need your Emirates ID or labour card number and details of your claim.
- Mediation. MOHRE will first try to settle the dispute between you and the employer.
- Decision or court. Since the 2024 amendment, MOHRE can decide disputes worth up to AED 50,000 itself. Larger or unresolved claims go to the labour court. Workers do not pay court fees for claims under AED 100,000.
Time limits matter. Federal Decree-Law No. 9 of 2024 set a two-year limit to bring a labour claim after the job ends. Do not wait until the last moment.
Practical tips for workers
- Keep a copy of your offer letter, contract and every salary change letter. The last basic wage is what counts.
- If you are close to five years of service, think about whether staying a few extra months makes sense. The rate jumps from 21 to 30 days.
- Ask your employer whether you are in the voluntary savings scheme. If yes, ask for your fund statement.
- Run the numbers on your unused leave salary as well. It is a separate payment.
- Never sign a final settlement paper that says you received money before the money is actually in your account.
- Moving to Saudi Arabia or Qatar? The rules there are different. See our Saudi End of Service Calculator and Qatar Gratuity Calculator.
Frequently asked questions
Is gratuity in the UAE calculated on basic salary or total salary?
On basic salary only. Article 51 of Federal Decree-Law No. 33 of 2021 says gratuity is based on the basic wage. Housing, transport and other allowances are not included unless your contract says otherwise.
Do I get gratuity if I resign in the UAE?
Yes, if you have at least one year of continuous service. The current law does not cut gratuity for resignation. The old rule that gave only one third or two thirds of gratuity to people who resigned early was removed when the new law started in February 2022.
What happens if I worked less than one year?
You are not entitled to gratuity under the law if your continuous service is less than one full year. You are still owed your unpaid salary, unused leave and any notice pay.
How many days of gratuity do I get per year?
21 days of basic wage for each of the first five years, and 30 days of basic wage for each year after five years. Part years are paid pro-rata.
How is the daily wage worked out for gratuity?
The common method used by employers and the Ministry is basic monthly salary divided by 30. For example, a basic salary of AED 6,000 gives a daily wage of AED 200.
Is there a maximum gratuity in the UAE?
Yes. Total gratuity cannot be more than two years of wages. With a basic salary of AED 10,000, the most you can receive is AED 240,000.
Do unpaid leave days reduce my gratuity?
Yes. Days of absence without pay are not counted as service. Paid annual leave, paid sick leave and public holidays still count.
When must my employer pay my gratuity?
Article 53 says wages and end of service benefits must be paid within 14 days of the end of the contract.
Does this calculator work for DIFC or ADGM employees?
No. DIFC and ADGM have their own employment laws. DIFC replaced gratuity with the DEWS savings plan in 2020, and ADGM has its own Employment Regulations. Check with your free zone authority.
Can my employer deduct money from my gratuity?
The law allows the employer to deduct amounts you legally owe, such as an unpaid loan or advance. It cannot make random deductions. If you disagree with a deduction, you can file a complaint with MOHRE.
Disclaimer
This calculator and article give an estimate for general guidance only. They are not legal advice. Your contract, company policy or a court decision may lead to a different amount. Always confirm your final figures with your employer or the Ministry of Human Resources and Emiratisation.
Sources and references
Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relations (Articles 30, 44, 51 and 53); Cabinet Resolution No. 1 of 2022 on its Executive Regulations; Federal Decree-Law No. 9 of 2024 amending Decree-Law 33 of 2021; Cabinet Resolution No. 96 of 2023 on the alternative end of service benefits system; Federal Decree-Law No. 9 of 2022 on Domestic Workers; DIFC Employment Law No. 2 of 2019 (DEWS). Official summary: UAE Government portal – End of service benefits for private sector employees.