How UAE gratuity is calculated
Under Federal Decree-Law No. 33 of 2021, private-sector employees who complete at least one year of continuous service receive:
- 21 days' basic wage for each of the first five years;
- 30 days' basic wage for each year after five;
- Partial years proportionally, once the first year is complete.
gratuity = (basic ÷ 30) × 21 × min(years, 5) + (basic ÷ 30) × 30 × max(years − 5, 0)
The total cannot exceed two years' basic salary.
Basic salary only
Gratuity uses your basic salary — housing, transport and other allowances, commissions and bonuses are not included.
Resignation
Under the current law, resignation and termination give the same gratuity. The old reductions for resigning on unlimited contracts no longer apply.
Example
Basic salary AED 10,000 and 8 years of service: years 1–5 give 5 × 7,000 = AED 35,000; years 6–8 give 3 × 10,000 = AED 30,000; total AED 65,000.
Guide only. Free-zone (DIFC, ADGM) and government employees follow different rules, and employers may deduct amounts you owe. Check with HR or MOHRE for your case.
Frequently asked questions
How is gratuity calculated in the UAE?
21 days of basic salary for each of the first five years and 30 days for each year after, with daily wage = basic ÷ 30, capped at two years' basic salary.
Do I get gratuity if I resign?
Yes. Under the 2021 labour law, resignation and termination give the same gratuity once you have completed one year.
Is gratuity paid for less than one year?
No. You need at least one year of continuous service.
Are allowances included in UAE gratuity?
No. Only the basic salary is used.