UAE · 3 min read

UAE End-of-Service Gratuity Explained (Labour Law)

How end-of-service gratuity is worked out under the UAE Labour Law for private-sector staff: 21 and 30 days' pay rules, the cap, and worked examples.

By the Handy Tools Desk team · Published 14 November 2026

When you leave a private-sector job in the UAE after at least a year, your employer owes you an end-of-service gratuity. It is set by Federal Decree-Law No. 33 of 2021 (the UAE Labour Law) and is based on your basic salary and how long you worked. This article explains the rules and works through examples.

For your own dates and salary, use the UAE gratuity calculator.

Who the rules cover

These rules are for employees in the UAE private sector covered by the federal Labour Law. Free zones with their own employment law, such as DIFC and ADGM, have different end-of-service rules, and public-sector staff are covered by separate schemes. If you are not sure which law applies, check your contract or ask your employer's HR team.

The basic rules

• You must complete at least 1 year of continuous service. Below that, no gratuity is due.
• For each of the first 5 years, you get 21 days of basic salary.
• For each year after the first five, you get 30 days of basic salary.
• Part years count in proportion to the time worked.
• The total cannot be more than 24 months (two years) of basic salary.

Basic salary only

Gratuity is worked out on your basic salary – not on housing, transport or other allowances. Your daily wage for this purpose is your monthly basic salary divided by 30. Check your contract or payslip for the basic figure, because it is often much lower than your total package.

Worked example: 3 years on AED 10,000 basic

• Daily wage: AED 10,000 ÷ 30 = AED 333.33
• 3 years × 21 days × daily wage = AED 21,000.00

Worked example: 8 years on AED 10,000 basic

• First 5 years at 21 days a year: AED 35,000.00
• Next 3 years at 30 days a year: AED 30,000.00
• Total: AED 65,000.00

Worked example: the two-year cap

After a very long career the formula would give more than two years' basic salary, so the cap applies. On AED 10,000 basic after 30 years:

• The cap is 24 × AED 10,000 = AED 240,000.
• Gratuity paid: AED 240,000.00 – the formula's result is limited to the cap.

Unpaid leave and time off

Days of unpaid leave are not counted as service when working out gratuity. If you took unpaid leave, the calculator lets you enter those days so they are taken off your service.

When it must be paid

The law requires your employer to pay what you are owed, including gratuity, within a set period after your contract ends. If there is a dispute, you can raise a complaint with the Ministry of Human Resources and Emiratisation (MOHRE).

Sending it home

If you are sending your gratuity to another country, our AED currency converter shows roughly what it is worth in pounds, rupees or other currencies, using the date of the rate it shows. Your bank or exchange service will use its own rate on the day.

Frequently asked questions

Do I get gratuity if I resign?

Under the current Labour Law, gratuity is due when your employment ends after at least 1 year of continuous service, whether you resign or your employer ends the contract. The older rules that reduced gratuity for people who resigned early no longer apply to private-sector contracts under the 2021 law. Your employer can still deduct amounts you legally owe them.

Is gratuity based on my total salary?

No. It is based on your basic salary only. Allowances such as housing and transport are not included, which is why two people on the same total package can be owed very different amounts.

How is a part year counted?

Part years count in proportion. Someone with 3 years and 6 months of service gets three and a half years' worth of the 21-day entitlement. The calculator works this out from your exact start and end dates.

Does gratuity apply in DIFC and ADGM?

No. DIFC and ADGM have their own employment laws and end-of-service arrangements, so this calculation does not apply there. Check with your employer which scheme covers you.

Is gratuity taxed in the UAE?

The UAE has no personal income tax on salaries, so gratuity is paid in full in the UAE. If you move to another country, check whether that country taxes money you bring in.

Open the uae gratuity calculator