UAE Gratuity FAQ

UAE gratuity, also called an end-of-service benefit (EOSB), is a lump-sum payment that eligible private-sector employees receive when their employment ends. It is calculated based on the employee's basic wage and length of continuous service. The legal basis is Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, primarily Article 51.

Yes. Under UAE Labour Law, qualifying private-sector employees are entitled to end-of-service gratuity. Employers are legally required to pay it upon termination of a qualifying employment relationship. It is not voluntary — it is a statutory entitlement.

Gratuity is not included in your monthly salary. It is an end-of-service payment made when employment ends, provided the eligibility threshold is met. Some employers may structure total compensation packages that reference gratuity, but the statutory entitlement itself is paid at the end of the employment relationship.

End-of-service benefit (EOSB) is the formal term used in UAE law for what is commonly called gratuity. It is a payment made to eligible employees when their employment ends, calculated on the basis of their last basic wage and total years of continuous eligible service. The final settlement an employee receives may also include other components such as unpaid salary, accrued annual leave, and notice-related amounts.

Under the standard UAE private-sector framework, total gratuity shall not exceed the equivalent of two years' basic wage. This means if the calculated gratuity based on days and daily wage exceeds two years of basic salary, it is capped at that amount. Use our calculator to see whether the cap applies to your situation.

Yes. Under the standard UAE framework, the maximum gratuity is capped at the equivalent of two years' basic wage. For example, if your monthly basic salary is AED 10,000, your annual basic wage is AED 120,000, and the maximum gratuity cap is AED 240,000. Individual circumstances and applicable regimes may affect this.

Generally, UAE gratuity is payable upon the termination of the employment relationship. Advance payment of gratuity is not a standard provision under the general UAE Labour Law framework. Some employers may have separate arrangements, but these should be reviewed carefully. Contact MOHRE or a qualified UAE employment lawyer for guidance on your specific situation.

You can estimate your gratuity using our free calculator on this website. For official verification, you can contact MOHRE (Ministry of Human Resources and Emiratisation) through the MOHRE website at mohre.gov.ae, their smart services platform, or their call centre. Your employer is also required to provide a clear account of end-of-service entitlements.

UAE Labour Law generally protects employee rights and does not allow waiver of statutory entitlements through contractual provisions that are less favourable than the law. An employee cannot be made to sign away their legal gratuity entitlement. If you believe your employer is improperly withholding gratuity, you should contact MOHRE.

Part-time workers and other flexible work models are recognised under Federal Decree-Law No. 33 of 2021. However, the gratuity calculation for part-time and other non-standard work models may differ from the standard full-time calculation. Specific rules apply based on the work model and contract. Verify your specific entitlement with MOHRE or a legal professional.

Under the general UAE private-sector framework: (1) Determine your last basic monthly salary. (2) Calculate your daily wage: monthly salary ÷ 30. (3) For the first 5 years of eligible service: multiply daily wage × 21 × number of years. (4) For service beyond 5 years: multiply daily wage × 30 × remaining years. (5) Add both amounts. (6) Apply the maximum cap (2 years' basic wage). Partial years are calculated proportionally. Use our calculator for an instant estimate.

UAE gratuity is calculated based on your last basic wage (not gross salary including allowances). Your daily wage is derived by dividing your monthly basic salary by 30. You then apply 21 days per year for the first 5 years and 30 days per year for service beyond 5 years. The result cannot exceed the equivalent of two years' basic wage.

UAE gratuity formula (general private-sector framework): Daily wage = Monthly basic salary ÷ 30. For years 1–5: Gratuity = Daily wage × 21 × years served (up to 5). For years beyond 5: Gratuity = Daily wage × 30 × additional years. Total = First period + Second period (subject to 2-year wage cap). Partial years are calculated proportionally by days.

Enter your basic monthly salary, joining date, and last working date into our UAE gratuity calculator. The calculator will immediately show your estimated gratuity, the full formula used, and a year-by-year breakdown. You can also download a PDF report of your calculation.

In the UAE: identify your basic monthly salary (not total salary), determine your eligible service period in years and days, calculate your daily wage (monthly salary ÷ 30), apply 21 days per year for the first 5 years and 30 days per year thereafter, then total the amounts. Verify the result does not exceed the 2-year wage cap.

Your gratuity is calculated on your basic salary only — not your gross salary or total compensation. Housing allowance, transport allowance, and other standard allowances are not included. Enter only your basic monthly salary into the calculator.

In the UAE, the daily wage for gratuity purposes is calculated by dividing the monthly basic salary by 30 days. This is the UAE Labour Law standard. The figure 26 is used in India's Gratuity Act to derive daily wages based on 26 working days per month — this is an India-specific rule and does not apply in the UAE. See our UAE vs India comparison page for more information.

The number 26 appears in Indian gratuity calculations, not UAE calculations. Under India's Payment of Gratuity Act 1972, the formula uses 26 working days per month. In the UAE, the divisor is 30 days per month under UAE Labour Law. These are different legal systems with different rules.

The 4.81% figure relates to Indian gratuity calculations, not UAE gratuity. In India, the formula (15/26) × number of years × monthly salary produces approximately 0.577 months per year, which is sometimes expressed as 4.81% of annual salary. This formula does not apply in the UAE. See our UAE vs India comparison for the correct UAE formula.

Under the general UAE private-sector framework, employees who have completed at least one full year of continuous service are eligible for end-of-service gratuity. This applies to qualifying private-sector employees. Special categories such as domestic workers, free-zone workers, UAE nationals covered by pension schemes, and workers under the End-of-Service Savings Scheme may have different rules.

No. In the UAE, the minimum requirement is one full year of continuous service. You become eligible for gratuity after completing one year, not five. The 5-year threshold is only significant because it determines the rate: for the first 5 years, the rate is 21 days per year; for service beyond 5 years, it increases to 30 days per year.

In the UAE, gratuity eligibility begins after one full year of service. There is no 4.8-year or 4 years 8 months rule for basic eligibility. A common misconception comes from India, where some interpretations of the Payment of Gratuity Act consider 4 years and 240 days (approximately 4.8 years) as qualifying for the 5th year. This does not apply in the UAE.

Yes, in the UAE, any completed period of service of at least one year makes you eligible for gratuity. If you have worked 4 years and 7 months, you are eligible. You will receive gratuity for 4 complete years at 21 days per year, plus a proportional amount for the additional 7 months. Use our calculator to see the exact amount.

Yes. In the UAE, you are eligible for gratuity after one complete year. If you have served approximately 4 years and a fraction, you are eligible. The 4 complete years will be calculated at 21 days per year, and the partial year will be calculated proportionally. Enter your exact dates into our calculator for a precise estimate.

Under UAE Labour Law, the probation period (up to 6 months) is generally considered part of the total service period for gratuity calculation purposes, provided the employment continues beyond probation. If employment is terminated during probation, gratuity rules may differ. Consult MOHRE or your employment contract for specific terms.

Periods of approved unpaid leave may be excluded from the eligible service period used for gratuity calculation under the general UAE framework. This can reduce the effective service period. Our calculator includes an optional field to enter unpaid absence days, which are then excluded from the service period. Verify your specific situation with MOHRE.

This question appears to reference Indian gratuity rules, not UAE rules. In India, Rule 3 of the Payment of Gratuity Rules relates to notice of application for gratuity. In the UAE, the relevant legal basis is Federal Decree-Law No. 33 of 2021, particularly Article 51 for the calculation and Article 53 where applicable. UAE and Indian gratuity rules are separate systems.

Under the current UAE Labour Law (Federal Decree-Law No. 33 of 2021), employees who resign and have completed at least one year of continuous service are generally entitled to end-of-service gratuity. The old framework that applied reduced gratuity for resignation (1/3 or 2/3 of entitlement depending on years served) applied under the previous law to unlimited contracts. Verify your contract and circumstances with MOHRE for your specific situation.

Yes. Under the current UAE Labour Law framework, if you resign after completing at least one year of service, you are generally entitled to gratuity. After 5 years, the rate for service beyond 5 years increases to 30 days per year. The old reduced-resignation-gratuity rules applied under the previous law. Use our calculator to estimate your entitlement.

Yes. Completing more than 5 years of service and then resigning generally entitles you to full gratuity under the current UAE framework: 21 days per year for the first 5 years and 30 days per year for service beyond 5 years. Verify your specific contract and circumstances with MOHRE.

If you resign after at least one year of service, you are generally entitled to your calculated gratuity under the current framework. Your employer is required to settle your final entitlements within the timeframe prescribed by law. If payment is delayed or withheld, you can file a complaint with MOHRE.

If your employment is terminated and you have completed at least one year of service, you are generally entitled to gratuity. If termination is for lawful reasons under UAE Labour Law, your gratuity is typically calculated in full. If terminated for specific gross misconduct reasons prescribed by law, different rules may apply. Consult MOHRE for guidance on your specific circumstances.

Yes. UAE gratuity is calculated based on your last basic wage only. Your basic salary is the core fixed component of your pay, excluding housing allowance, transport allowance, and other standard allowances. Always enter only your basic monthly salary — not your total package — into the gratuity calculator.

No. Standard allowances such as housing, transport, and other fixed allowances are generally not included in the basic wage for UAE gratuity calculation purposes. Only the basic wage component is used. This is an important distinction — many employees mistakenly enter their gross salary, which will produce an inflated estimate.

In the UAE, gratuity is calculated on basic salary only — not on CTC (Cost to Company) or total compensation. CTC is a concept more commonly used in India. In the UAE, use only your basic monthly salary for the calculation. In India, gratuity is also calculated on basic salary plus dearness allowance, not full CTC — but that is an India-specific rule. See our UAE vs India comparison.

For 2 complete years of service: Daily wage = Monthly basic salary ÷ 30. Gratuity = Daily wage × 21 × 2. Example: AED 10,000 basic salary → Daily wage = AED 333.33. Gratuity = 333.33 × 21 × 2 = AED 14,000. Use our calculator for instant results.

After exactly 5 years: Daily wage = Monthly basic salary ÷ 30. Gratuity = Daily wage × 21 × 5. Example: AED 10,000 basic salary → Daily wage = AED 333.33. Gratuity = 333.33 × 21 × 5 = AED 35,000. Service beyond 5 years earns 30 days per year instead of 21.

After exactly 5 years, you receive 21 days' basic wage for each of those 5 years. If your basic salary is AED 10,000, your daily wage is AED 333.33 and your gratuity would be approximately AED 35,000. Any service beyond 5 years earns a higher rate of 30 days per year.

For 8 years of service: First 5 years at 21 days/year + 3 additional years at 30 days/year. Example: AED 10,000 basic salary → Daily wage = AED 333.33. First 5 years: 333.33 × 21 × 5 = AED 35,000. Next 3 years: 333.33 × 30 × 3 = AED 30,000. Total ≈ AED 65,000. Use our calculator for your specific dates.

For 4 complete years: Daily wage = Monthly basic salary ÷ 30. Gratuity = Daily wage × 21 × 4. Example: AED 8,000 basic salary → Daily wage = AED 266.67. Gratuity = 266.67 × 21 × 4 = AED 22,400. Partial years beyond complete years are added proportionally.

For 7 years 7 months: First 5 years at 21 days/year + 2 years 7 months at 30 days/year. The 7-month partial year = 30 days × (7/12). Example: AED 10,000 basic salary → Daily wage = AED 333.33. First 5 years: 333.33 × 21 × 5 = AED 35,000. 2 complete years beyond 5: 333.33 × 30 × 2 = AED 20,000. 7 months: 333.33 × 30 × (7/12) ≈ AED 5,833. Total ≈ AED 60,833. Use our calculator for a precise breakdown.

Partial years are calculated proportionally based on days. For service within the first 5 years: daily wage × 21 × (days in partial year / 365). For service beyond 5 years: daily wage × 30 × (days in partial year / 365). Our calculator handles leap years and edge cases automatically.

As of 2026, the UAE general private-sector gratuity framework continues under Federal Decree-Law No. 33 of 2021. The standard formula remains: 21 days' basic wage per year for the first 5 years, 30 days' basic wage per year for service beyond 5 years, subject to the 2-year wage cap. No fundamental changes to the calculation formula are known to have been made for 2026. Always verify current rules with MOHRE.

The current UAE gratuity framework is governed by Federal Decree-Law No. 33 of 2021, which took effect in February 2022. Key changes from the previous law include: the removal of the limited/unlimited contract distinction for general private-sector workers, the introduction of new work models, and a clearer gratuity entitlement framework. The standard calculation rates (21 days/30 days) remain unchanged.

In 2026, UAE gratuity continues to be calculated under the framework of Federal Decree-Law No. 33 of 2021: daily wage (monthly basic salary ÷ 30) × 21 days per year for the first 5 years, then 30 days per year for service beyond 5 years, with a maximum cap of 2 years' basic wage. Use our 2026 calculator for an up-to-date estimate.

The latest UAE Labour Law reform (Federal Decree-Law No. 33 of 2021) is the primary basis for current gratuity rules. Key provisions include: minimum 1 year service for eligibility, 21 days/year for first 5 years, 30 days/year thereafter, 2-year maximum cap, and eligibility regardless of resignation (subject to minimum service). Special employment regimes may have additional rules.

As of 2026, no new fundamental changes to the UAE gratuity calculation formula have been introduced beyond the framework established by Federal Decree-Law No. 33 of 2021. The standard formula (21 days for first 5 years, 30 days thereafter) remains the general rule. Monitor MOHRE announcements and our Legal Updates page for any changes.

The most significant recent change was Federal Decree-Law No. 33 of 2021 (effective February 2022), which replaced the previous UAE Labour Law. The key change relevant to gratuity was the removal of the distinction between limited and unlimited contracts, which previously affected gratuity entitlement on resignation. The standard calculation rates were maintained. The optional End-of-Service Savings Scheme was also introduced as an alternative framework.

Under the current UAE Labour Law (Federal Decree-Law No. 33 of 2021): gratuity = (monthly basic salary ÷ 30) × eligible days. Eligible days: 21 per year for first 5 years + 30 per year for service beyond 5 years. Maximum: 2 years' basic wage. Eligible service = total service minus unpaid absence.

The terms "unlimited contract" and "limited contract" were used under the previous UAE Labour Law (Federal Law No. 8 of 1980). Under the old framework, unlimited contract gratuity on resignation was subject to reduced rates (1/3 of entitlement for 1–3 years, 2/3 for 3–5 years). The current law (Federal Decree-Law No. 33 of 2021) removed this distinction. If your employment started before February 2022, consult a legal professional about which framework applies to your contract.

MOHRE stands for the Ministry of Human Resources and Emiratisation. It is the UAE government body responsible for labour relations in the private sector, including implementation of UAE Labour Law, licensing of employment establishments, and handling worker complaints. Their website is mohre.gov.ae. This website is independent and not affiliated with MOHRE.

UAE Labour Law requires employers to pay end-of-service gratuity within the timeframe prescribed by law. Generally, entitlements should be settled upon termination of employment. Delays in payment are a violation of the law and can be reported to MOHRE. If your employer has not paid gratuity within a reasonable period after your employment ended, contact MOHRE.

The notice period — the period worked after giving or receiving notice of termination — generally counts as part of the total service period for gratuity purposes. If an employee is not required to work the notice period (garden leave or payment in lieu), the legal impact on gratuity depends on the circumstances and your employment contract. Consult MOHRE or a legal professional for your specific situation.

You can use our independent calculator for an estimate. For verification, you can: (1) Use the MOHRE smart services platform. (2) Consult your employment contract and UAE Labour Law directly. (3) Contact MOHRE through their official helpline. (4) Consult a qualified UAE employment lawyer. This website provides estimates only and does not constitute legal advice.

This website covers UAE gratuity only. India's gratuity is governed by the Payment of Gratuity Act 1972 and uses a different formula (15/26 × monthly salary × years of service). India has also discussed increasing the maximum gratuity limit. For Indian gratuity information, consult an India-specific resource. See our UAE vs India comparison page for a clear explanation of the differences.

The "20 lakhs" gratuity figure refers to India's Payment of Gratuity Act, where INR 20,00,000 (20 lakhs) is the maximum tax-free gratuity under Indian law. This does not apply in the UAE. UAE gratuity is governed by UAE Labour Law and calculated in AED. See our UAE vs India comparison page for a detailed breakdown of the differences.

This website is specifically for UAE gratuity calculations. Indian gratuity is calculated under the Payment of Gratuity Act 1972 using: (15 × monthly salary × years of service) ÷ 26. Please use an India-specific gratuity calculator for Indian calculations. Our UAE vs India comparison page explains the key differences.

For UAE gratuity in Excel: Daily wage = B2/30 (where B2 = monthly basic salary). First 5 years amount = IF(years>=5, daily_wage*21*5, daily_wage*21*years). Beyond 5 years = IF(years>5, daily_wage*30*(years-5), 0). Total = MIN(first_period + second_period, monthly_salary*12*2). However, our online calculator handles all edge cases automatically including partial years, leap years, and the cap.