Gratuity, or end of service benefit, is a lump sum your employer pays when your job in the UAE ends. For private sector employees it is set by Article 51 of Federal Decree-Law No. 33 of 2021, the Labour Law that came into force in February 2022.
Who is entitled
You qualify if you are a full-time private sector employee and have completed at least one year of continuous service with the same employer. Under one year, no gratuity is due.
The formula
- 21 days of basic salary for each of the first five years of service.
- 30 days of basic salary for each year after the fifth.
- Part years are paid in proportion.
- The total is capped at two years of basic salary.
Only basic salary counts. Allowances for housing, transport, phone and similar are left out. Days of unpaid leave are not counted as service.
Worked examples
| Basic salary | Service | Days paid | Gratuity |
|---|---|---|---|
| AED 4,000 | 3 years | 63 | AED 8,400 |
| AED 5,000 | 7 years | 165 | AED 27,500 |
| AED 10,000 | 10 years | 255 | AED 85,000 |
For AED 5,000 basic and 7 years: one day's pay is AED 5,000 ÷ 30 = AED 166.67. Five years × 21 days = 105 days, plus two years × 30 days = 60 days. Total 165 days × AED 166.67 = AED 27,500.
Resigning no longer reduces gratuity
Under the old law, people who resigned early lost part of their gratuity. The current law removed those reductions, so the same formula applies whether you resign or your employer ends the contract.
When it must be paid
Your employer must pay all end of service dues within 14 days of the contract ending. If payment is late, you can file a complaint with MOHRE.
Where this does not apply
Employees in DIFC and ADGM follow their own employment laws, and federal and local government employees have separate schemes. Check with your HR department if you are unsure which rules cover you.
Want the exact figure for your case?
Calculate your gratuity