26/10/2026
For private-sector employees in the UAE, end-of-service benefits (gratuity) are calculated based on (excluding allowances) and continuous years of service. The core rules are: 21 days' basic salary per year for the first 5 years, 30 days' basic salary per year thereafter, with a total cap not exceeding 2 years' wages; eligibility requires completion of at least 1 year of continuous service.
Core Calculation Formula
Daily wage = monthly basic salary ÷ 30
Gratuity = (21 days × daily wage × years of service up to 5 years) + (30 days × daily wage × years of service beyond 5 years)
Fractions of a year are calculated proportionally, provided the 1-year threshold has been met.
Example Calculation
Assume monthly basic salary of 12,000 dirhams, 8 years of service:
• Daily wage = 12,000 ÷ 30 = 400 dirhams
• First 5 years: 21 × 400 × 5 = 42,000 dirhams
• Additional 3 years: 30 × 400 × 3 = 36,000 dirhams
• Total gratuity: 78,000 dirhams
Key Rules
• Calculation base: Only basic salary is included; housing, transportation, and other allowances are excluded.
• Resignation unaffected: Under the current law (Federal Decree-Law No. 33 of 2021), resignation and termination receive the same calculation; there is no longer a "resignation deduction" under the old law.
• Cap: Total gratuity shall not exceed 2 years' wages.
• Payment deadline: Employer must pay all dues within 14 days of contract termination.
If your company has joined the voluntary Savings Scheme, service before enrollment is still calculated under the traditionally rules above, while subsequent portions are contributed monthly by the employer to investment funds, with the final amount depending on account returns.
If you can provide your monthly basic salary and specific years of service (including months), I can help you calculate the exact amount