UAE gratuity rules explained
Work it out with your own numbersUAE gratuity calculator: End-of-service pay under UAE labour law.Open the calculator →In the UAE private sector, your end-of-service gratuity is 21 days of basic salary for each of your first five years, and 30 days for each year after that, once you have completed one year of service. The daily wage is your basic monthly salary divided by 30, part years are paid in proportion, and the total can never be more than two years of basic salary. This comes from Article 51 of Federal Decree-Law No. 33 of 2021, the UAE Labour Law.
Resigning no longer reduces your gratuity. This guide explains the rules with worked examples. To use your own dates and salary, open the UAE gratuity calculator.
Who gets gratuity in the UAE?
- Covered: private-sector employees under Federal Decree-Law No. 33 of 2021, with at least one year of continuous service. This applies to full-time and part-time workers.
- DIFC: has its own law (DIFC Employment Law No. 2 of 2019). Gratuity stopped building up there on 1 February 2020 and was replaced by a savings plan. See below.
- Mainland savings scheme: under Cabinet Resolution No. 96 of 2023, an employer can choose a voluntary savings scheme instead of gratuity.
- Different rules: ADGM in Abu Dhabi and government jobs have their own rules. This guide does not cover them.
- Under one year of service: no gratuity.
How is gratuity calculated in the UAE?
daily wage = basic monthly salary ÷ 30
first 5 years: daily wage × 21 days × years
years after 5: daily wage × 30 days × years
gratuity = both parts added, at most 24 × basic monthly salary
part-time: years counted = years × your hours ÷ full-time hours
Service runs from your joining date to your last working day. Part years are paid in proportion: whole months as twelfths of a year, extra days on a 365-day year. Unpaid leave days are taken off (Article 51(4)).
A quick check: 21 days is 0.7 of a month and 30 days is one month. So for the first five years you earn about 0.7 × basic per year, and after that 1 × basic per year.
Days of gratuity by length of service
| Service | Days per year | Total days | Months of basic |
|---|---|---|---|
| Under 1 year | None | 0 | 0 |
| 1 year | 21 | 21 | 0.7 |
| 3 years | 21 | 63 | 2.1 |
| 5 years | 21 | 105 | 3.5 |
| 10 years | 21, then 30 | 255 | 8.5 |
| 15 years | 21, then 30 | 405 | 13.5 |
| 20 years | 21, then 30 | 555 | 18.5 |
| 25.5 years or more | Cap reached | 720 | 24 (cap) |
Does housing allowance count for UAE gratuity?
No. Gratuity is based on your basic wage only. The law defines "wage" as including allowances and "basic wage" as leaving them out (Article 1), and gratuity uses basic wage. Housing, transport, phone and other allowances do not count. Check the basic figure on your contract or payslip.
Do I lose gratuity if I resign?
Not any more. Under the old law (Federal Law No. 8 of 1980), resigning before five years cut your gratuity. The 2021 law, in force since February 2022, removed that cut. You now get the same amount whether you resign or your employer ends the contract, as long as you have at least one year of service.
Worked examples
Example 1: 3 years and 8 months on AED 12,000
You worked from 1 January 2022 to 31 August 2025, which is 3 years and 8 months (3.667 years).
- Daily wage: 12,000 ÷ 30 = AED 400
- All of it is in the first five years: 400 × 21 × 3.667 = AED 30,800
Example 2: 8 years and 8 months on AED 12,000
You worked from 1 January 2017 to 31 August 2025, which is 8.667 years.
- First 5 years: 400 × 21 × 5 = AED 42,000
- Remaining 3.667 years: 400 × 30 × 3.667 = AED 44,000
- Gratuity: 42,000 + 44,000 = AED 86,000, about 7.17 months of basic salary
Example 3: long service and the two-year cap
You worked 28 years, from 1 January 1998 to 31 December 2025, on AED 10,000 basic. The daily wage is AED 333.33.
- First 5 years: 333.33 × 21 × 5 = AED 35,000
- Next 23 years: 333.33 × 30 × 23 = AED 230,000
- Total before the cap: AED 265,000
- Cap: 24 × 10,000 = AED 240,000, so you get AED 240,000
Example 4: part-time, and under one year
You worked 6 years and 3 months part-time, 4 hours a day where full-time is 8, on AED 10,000 basic. Your service counts as 6.25 × 4 ÷ 8 = 3.125 years, all at 21 days: 333.33 × 21 × 3.125 = AED 21,875.
If you worked 11 months full-time on the same salary and left, you would get nothing, because you did not complete one year.
DIFC and the savings schemes
In the DIFC, gratuity stopped building up on 1 February 2020. Since then, employers pay a monthly contribution into DEWS (the DIFC Employee Workplace Savings plan) or another approved scheme. The mainland voluntary scheme under Cabinet Resolution No. 96 of 2023 uses the same rates.
| Total service | Monthly contribution | Same as |
|---|---|---|
| Under 5 years | 5.83% of basic | 21 days a year |
| 5 years or more | 8.33% of basic | 30 days a year |
On AED 20,000 basic, that is AED 1,166 a month under five years and AED 1,666 a month after. Your real balance also depends on your salary each month and on investment growth or losses. Gratuity earned before the switch is still owed to you, and in the DIFC it has no two-year cap. Our calculator has a DIFC and a savings-scheme option that splits your service at the switch date.
What else is in your final settlement?
- Unused annual leave. Full-time workers get 30 days of paid leave a year after one year of service, and 2 days a month after 6 months in the first year. Unused leave paid when you leave is worked out on your basic wage (Article 29(9)). The UAE leave salary calculator works out the days you have earned and what they are worth.
- Notice pay. Notice is 30 to 90 days, as your contract says. If you do not work it, it is paid at your full wage.
- Unpaid overtime. Overtime is paid at the basic hourly wage plus at least 25%, or plus at least 50% between 10 pm and 4 am (Article 19). Check what you are owed with the UAE overtime calculator.
- Salary for days worked in your last month.
- Minus loans or advances you owe your employer.
Your employer must pay all of this within 14 days of the contract ending.
For the full picture, with notice pay, deductions and the 14-day payment deadline, see UAE final settlement explained.
Common mistakes
- Using total salary. Only basic salary counts, unless your contract gives more.
- Using 30 days from year one. The first five years are at 21 days, even if you stay longer than five.
- Applying the old resignation cut. It was removed in February 2022.
- Forgetting the cap. After about 25.5 years at the same basic salary, gratuity stops growing at 24 months of basic.
- Ignoring unpaid leave. Unpaid days come off your service.
- Using mainland rules in the DIFC. DIFC service after 1 February 2020 earns savings contributions, not gratuity.
What if my employer disagrees?
- Ask for the calculation in writing: the basic salary, dates and unpaid leave used.
- Compare it with your contract and payslips. Check which salary was used as basic, and the start date.
- Talk to HR and show your own working, for example a share link from the calculator.
- Contact MOHRE. On the mainland, you can file a labour complaint with the Ministry of Human Resources and Emiratisation (MOHRE). In the DIFC, use the DIFC's own channels. Keep copies of your contract, payslips and messages.
Quick summary
- 21 days of basic wage a year for the first 5 years, 30 days after (Article 51).
- Daily wage = basic monthly salary ÷ 30.
- Nothing under one year; part years paid in proportion.
- Capped at 24 months of basic salary.
- Resigning does not reduce it.
- Paid within 14 days of leaving.
Working in Qatar instead? See how Qatar gratuity is calculated or the Qatar gratuity calculator. For Oman, use the Oman end-of-service calculator.
Common questions
How is gratuity calculated in the UAE?
Under Federal Decree-Law No. 33 of 2021, you get 21 days of basic wage for each of the first five years and 30 days for each year after. The daily wage is basic monthly salary ÷ 30, part years are paid in proportion, and the total is capped at two years of basic wage.
Do I lose my gratuity if I resign in the UAE?
No. The old law (Federal Law No. 8 of 1980) cut gratuity if you resigned early, but the 2021 law, in force since February 2022, removed that cut. You get the same amount whether you resign or are let go, as long as you have one year of service.
Is UAE gratuity based on basic salary or total salary?
Basic salary. Housing, transport and other allowances are not included. Check your contract to see which amount is your basic wage.
What is the maximum gratuity in the UAE?
Two years of basic wage, which is 24 × your basic monthly salary. On AED 10,000 basic the cap is AED 240,000. The DIFC has no two-year cap on gratuity earned before 1 February 2020.
Do I get gratuity for less than one year in the UAE?
No. You need at least one year of continuous service. Days of unpaid leave are not counted in your service.
How long does my employer have to pay my gratuity?
Your employer must pay everything owed, including gratuity, unused leave and any notice pay, within 14 days of the contract ending.
How does gratuity work for part-time workers in the UAE?
Under Cabinet Resolution No. 1 of 2022, part-time service is counted by the hours actually worked. If you work 4 hours a day where full-time is 8, each year counts as half a year.
This guide explains the rules in plain English for planning. It is not legal, financial or flight-operations advice; check your contract, the official source linked above, your employer or your operator.