UAE Gratuity Calculator (End of Service)
UAE Gratuity Calculator (End of Service)
End-of-service gratuity for a foreign full-time employee in the UAE private sector under Federal Decree-Law No. 33 of 2021: 21 days’ basic wage a year for the first five years, 30 days after that.
UAE end-of-service gratuity
Basic wage AED 10,000 a month, 7 years and 4 months of service, no unpaid absence
Gratuity under Article 51
- B
- the last basic monthly wage, without allowances
- S
- years of continuous service, part years included, less days of unpaid absence; nothing is due under one year
- ÷ 30
- one day’s wage, from Article 67’s 30-day month
Worked example
Basic wage AED 10,000 a month, 7 years and 4 months of service, no unpaid absence
Service: 7 + 4 ÷ 12 = 7.3333 years
Days: 21 × 5 + 30 × 2.3333 = 105 + 70 = 175 days
One day's basic wage: 10,000 ÷ 30 = 333.33
Gratuity = 175 × 333.33 = AED 58,333 (below the cap of 24 × 10,000 = 2,40,000)
Basic wage of 10,000 a month
| Years of service | Days of wage | Gratuity |
|---|---|---|
| 1 | 21 | $7,000 |
| 3 | 63 | $21,000 |
| 5 | 105 | $35,000 |
| 10 | 255 | $85,000 |
| 20 | 555 | $1,85,000 |
| 26 | 735 | $2,40,000 |
How Article 51 works, and who it covers
Under Federal Decree-Law No. 33 of 2021, which regulates employment in the UAE private sector, a foreign full-time worker who has completed at least one year of continuous service is entitled to an end-of-service gratuity. It is calculated on the basic wage last received, without housing, transport or other allowances: 21 days’ wage for each of the first five years and 30 days’ wage for each year after that. Part years count in proportion once the first year is complete, and days of unpaid absence are left out of the service. The total cannot exceed two years’ wage.
On the example, 7 years and 4 months at AED 10,000 a month earns 175 days’ wage: AED 58,333. Three years would earn 63 days, AED 21,000.
Resignation. The earlier law, Federal Law No. 8 of 1980, paid a reduced gratuity to a worker who resigned with less than five years’ service. Article 51 of the 2021 Decree-Law contains no such reduction: the same rate applies however the employment ends. The employer may deduct amounts the worker owes under the law or a court judgment.
What this page does not cover. UAE nationals receive end-of-service benefits under the pension and social security legislation, not this formula. Part-time work is left to separate regulations. The Decree-Law also allows the Cabinet to approve alternative end-of-service schemes, such as a savings scheme; if your employer has moved you into one, its rules apply instead. Free zones are a harder question. The Decree-Law text we checked applies to “all establishments, employers and workers in the private sector” and does not mention free zones, so we have not stated a general rule for them. The financial free zones have their own employment laws: the DIFC replaced gratuity with the DEWS workplace savings scheme from 1 February 2020. If you work in a free zone, check with its authority.
Conventions. A day’s wage is the monthly basic wage ÷ 30, following the Decree-Law’s rule that a month is 30 days. Some employers use a different conversion, which changes the result slightly. Two years’ wage is taken as 24 months of basic wage. The page shows amounts in the currency you choose; for the UAE choose AED. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
How is gratuity calculated in the UAE?
On the last basic wage: 21 days’ wage for each of the first five years of service and 30 days’ for each year after, with part years in proportion once one year is complete, up to two years’ wage in total. 7 years 4 months at AED 10,000 a month gives 175 days: AED 58,333.
Do I get less gratuity if I resign?
Not under Federal Decree-Law No. 33 of 2021. Article 51 applies the same rate however the employment ends. The reduction for resignation was a feature of the old 1980 law.
Is gratuity paid for less than a year of service?
No. A worker needs at least one year of continuous service. After that, part years count in proportion.
Are allowances included?
No. The calculation uses the basic wage, which the law defines as the contractual wage without allowances or benefits in kind.
Related calculators
References
- United Arab Emirates. Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationships, Article 3 (scope), Article 51 (end-of-service gratuity) and Article 67 (a month is 30 days). https://uaelegislation.gov.ae/en/legislations/1541
- United Arab Emirates. Federal Law No. 8 of 1980 Regulating Labour Relations (repealed by the 2021 Decree-Law).
- Dubai International Financial Centre. DIFC Employment Law Amendment Law No. 4 of 2020: the DIFC Employee Workplace Savings (DEWS) scheme replaced end-of-service gratuity from 1 February 2020.