Last updated:
Who is covered
These rules come from Federal Decree-Law No. 33 of 2021, the UAE labour law in force since 2 February 2022, and apply to private-sector employees on the mainland and in most free zones.
They don't apply to DIFC employees (who are covered by the DEWS savings scheme), ADGM employees (who have their own employment regulations), or government employees.
You need at least one year of service
Gratuity is only due after one full year of continuous service. Someone who leaves after 11 months receives no gratuity, whether they resigned or were let go.
The formula
Daily wage = last monthly basic salary ÷ 30. Housing, transport and other allowances are not included.
For each of the first five years: 21 days' basic wage. For each year after five: 30 days' basic wage. Parts of a year count in proportion.
The total can't be more than two years' basic salary.
A worked example
Basic salary AED 10,000 a month, seven years of service. Daily wage = 10,000 ÷ 30 = AED 333.33.
First five years: 5 × 21 = 105 days. Next two years: 2 × 30 = 60 days. Total 165 days × AED 333.33 = AED 55,000.
Resigning no longer reduces gratuity
Under the old law, employees who resigned early received only a third or two-thirds of their gratuity. Since 2 February 2022 that reduction no longer exists: an employee with at least one year of service receives the full amount whether they resign or the contract ends.
Unpaid leave and payment time
Days of unpaid leave or unpaid absence don't count as service, so they reduce the period gratuity is calculated on.
The employer must pay end-of-service dues within 14 days of the last working day, and may deduct amounts the employee legally owes the company.
Check your own figure
Use the free UAE Gratuity Calculator with your basic salary, joining date and last working day. It is an estimate — for a dispute, confirm with your employer or MOHRE.