What Is UAE End of Service Gratuity and How Much Will You Receive?

Key Takeaways

• End of service gratuity is calculated based on 21 days salary for first 5 years, then 30 days per year thereafter
• Gratuity is calculated on basic salary only, excluding allowances and bonuses
• Employees are entitled to gratuity after completing one year of continuous service

UAE end of service gratuity is your legal entitlement to a lump-sum payment when leaving employment. Under Article 51 of Federal Decree-Law No. 33 of 2021, employees who complete at least one year receive 21 days' basic salary per year for the first five years, then 30 days per year thereafter, capped at two years' total salary.Leaving your job in the UAE comes with a significant financial benefit

that many employees don't fully understand. Whether you're planning to resign, facing redundancy, or simply want to know your rights, understanding gratuity calculations can mean the difference between receiving what you're owed and losing out on thousands of dirhams.Who Qualifies for End of Service Gratuity in the UAE?Your eligibility hinges on three primary factors. First, you must be a private

sector employee covered by Federal Decree-Law No. 33 of 2021. UAE and GCC nationals fall under different pension schemes, so gratuity applies specifically to expatriate workers.Second, you need at least one complete year of continuous service with your employer. Starting work on 1st January 2024 means you become eligible on 1st January 2025, not before. Any service period under 12 months results in

zero gratuity entitlement.Third, your termination reason matters less than you might think. Both resignations and employer-initiated terminations trigger gratuity payments, with one critical exception. Dismissal under Article 44 for serious misconduct—such as assault, theft, or revealing confidential information—can forfeit your entire entitlement. Standard performance-related terminations still

preserve your gratuity rights.Part-time and flexible contract workers also qualify, but calculations differ. Cabinet Resolution No. 1 of 2022 mandates pro-rated gratuity based on actual hours worked compared to full-time equivalents.How Do You Calculate Your Gratuity Payment?The calculation formula depends entirely on your length of service. Your basic salary forms the foundation—exclude all allowances

like housing, transport, phone, or utilities. Only the base figure matters.For years one through five, you receive 21 days of basic salary for each completed year. Take a monthly basic salary of AED 10,000. Your daily rate equals 10,000 ÷ 30 = AED 333.33. After three years of service, your gratuity would be 333.33 × 21 × 3 = AED 21,000.From year six onwards, the rate increases to 30 days per completed

year. An employee with eight years at the same salary would calculate: First five years at AED 35,000 (333.33 × 21 × 5), plus three additional years at AED 30,000 (333.33 × 30 × 3), totalling AED 65,000.The law caps all gratuity at two years' basic salary. For someone earning AED 10,000 monthly, the maximum payable amount is AED 240,000, regardless of tenure length. After 20 years of service,

you wouldn't receive more than this ceiling.Partial years count proportionally. Working six years and four months means you receive full entitlement for six years, plus four-twelfths of the s...

About This Article

This article provides general information about UAE labour law and employment regulations. The information is based on Federal Decree-Law No. 33 of 2021 and subsequent amendments. For specific legal advice regarding your situation, please consult with a qualified legal professional or contact the Ministry of Human Resources and Emiratisation (MOHRE).