Last updated: September 2026
In the UAE private sector, you earn end-of-service gratuity after at least one full year of continuous work. The law gives you 21 days of basic salary for each of your first five years, and 30 days of basic salary for every year after that. The total cannot be more than two years’ wage.
This guide explains the UAE gratuity calculation in 2026 step by step, with simple AED examples.
Quick summary
- You need at least 1 year of continuous service to get gratuity.
- Gratuity is based on your last basic salary only, not allowances.
- Years 1 to 5: 21 days’ basic salary per year. Year 6 onwards: 30 days per year.
- The total is capped at two years’ wage.
- Under the current law, resigning does not cut your gratuity.
- Your employer must pay your final dues within 14 days after your job ends.
- If you are not paid, complain to MOHRE through its app, website or the 80084 call centre.
What is end-of-service gratuity?
Gratuity is a lump-sum payment your employer gives you when your job ends. It is a reward for the years you worked. In the UAE private sector, it is set by Federal Decree-Law No. 33 of 2021 on labour relations, which came into force on 2 February 2022. Article 51 of this law explains how gratuity is worked out.
These rules cover workers on the UAE mainland and in most free zones. DIFC and ADGM have their own employment laws. Domestic workers such as housemaids and drivers are covered by a separate law, so their rules can be different.
Who is eligible for gratuity?
- You must be a full-time or part-time employee in the private sector.
- You must complete at least one year of continuous service with the same employer.
- If you leave before one year, you do not get gratuity, but you still get unpaid salary and pay for unused leave.
- Days of unpaid absence are not counted in your service period.
- Part-time workers get gratuity on a pro-rata basis, according to the hours they actually work.
Why only basic salary counts
Gratuity is calculated on your last basic salary. Housing, transport, food allowance, overtime, commission and bonuses are not included. Check your offer letter and MOHRE contract to see your real basic salary.
To find your daily wage, divide your monthly basic salary by 30.
The UAE gratuity formula (21 days and 30 days rule)
- Daily basic wage = monthly basic salary ÷ 30
- First 5 years = daily wage × 21 × number of years (up to 5)
- After 5 years = daily wage × 30 × each extra year
- Part of a year is counted in proportion, as long as you have finished at least one full year.
- Total gratuity = first 5 years amount + extra years amount, but not more than two years’ wage.
The two-year cap
The law says total gratuity must not be more than two years’ wage. In practice, this is commonly worked out as 24 months of basic salary. Most workers never reach this cap, because you would need to work for more than about 25 years.
Worked examples in AED
The examples below use simple numbers. Your real amount depends on your exact basic salary and exact service days.
| Worker | Basic salary | Service | Calculation | Gratuity |
|---|---|---|---|---|
| Construction helper | AED 1,500 | 3 years | 1,500 ÷ 30 = 50; 50 × 21 × 3 | AED 3,150 |
| Driver | AED 2,400 | 3 years 6 months | 2,400 ÷ 30 = 80; 80 × 21 × 3.5 | AED 5,880 |
| Supervisor | AED 3,000 | 8 years | 100 × 21 × 5 = 10,500; 100 × 30 × 3 = 9,000 | AED 19,500 |
| Long-serving staff | AED 2,000 | 30 years | 7,000 + 50,000 = 57,000; cap 24 × 2,000 = 48,000 | AED 48,000 (capped) |
| New worker | AED 2,000 | 10 months | Less than 1 year | No gratuity |
Tip: Your gratuity is only one part of your final settlement. You should also get any unpaid salary, pay for unused annual leave, and your air ticket if your contract promises one.
Limited vs unlimited contracts
Under the old labour law, there were two types of contract: limited (fixed-term) and unlimited. Your gratuity could change a lot depending on the type of contract and who ended it.
Under Federal Decree-Law 33 of 2021, all private sector contracts must be fixed-term. Employers had to change old unlimited contracts into fixed-term contracts. The Ministry of Human Resources and Emiratisation (MOHRE) extended the deadline for this to 31 December 2023. So in 2026, almost every worker should be on a fixed-term contract, and the same gratuity formula applies to everyone.
If you started work many years ago under the old law, and you have questions about gratuity for that older period, ask MOHRE to check your case before you sign your final settlement.
Resignation vs termination: does it change gratuity?
Under the old law, workers on unlimited contracts who resigned early lost part of their gratuity. For example, those with one to three years of service received only one-third.
That reduction does not apply under the current law. If you have finished at least one year, you get full gratuity whether:
- you resign and give proper notice,
- your employer ends your contract, or
- your fixed-term contract simply ends and is not renewed.
Even if you are dismissed for serious misconduct, you do not automatically lose your gratuity. However, the law allows the employer to deduct money you legally owe them, such as an unpaid loan or advance. Any deduction should be clear and supported by documents.
When must your employer pay?
Your employer must pay all end-of-service dues, including gratuity, within 14 days after your contract ends. Do not cancel your visa, sign a “full and final settlement” paper, or leave the UAE until you have checked the amount and received the money.
How to claim or complain through MOHRE
First, speak politely with your HR department and ask for a written breakdown of your final settlement. If they refuse or do not pay within 14 days, you can file a complaint with MOHRE. Filing a labour complaint is free.
- Collect your documents: Emirates ID, passport copy, labour contract, salary slips or bank statements, and any messages about your settlement.
- File the complaint through the MOHRE app, the MOHRE website, or a Tasheel service centre. You can also call the Labour Claims and Advisory Centre on toll-free 80084, which helps workers in many languages.
- MOHRE will first try to settle the dispute between you and your employer.
- For claims up to AED 50,000, MOHRE can issue a binding decision. Larger claims, or cases that cannot be settled, go to the labour court.
- Workers do not pay court fees for claims below AED 100,000.
Act quickly. There is a legal time limit for labour claims. A 2024 amendment to the law set this at two years from the end of the job, but it is always best to complain as soon as your dues are late.
Common mistakes to avoid
- Using total salary instead of basic salary. Allowances are not counted.
- Forgetting the 30-day rule after 5 years. Year 6 onwards is worth more than the early years.
- Ignoring part years. If you worked 4 years and 7 months, the 7 months also count.
- Signing a settlement paper before checking. Once you sign, it is harder to claim more.
- Believing you lose gratuity for resigning. That was the old rule for unlimited contracts.
- Waiting too long to complain. Late claims can be rejected.
Planning your next job after your contract ends? If you need a better job or a professional Gulf-ready CV, the team at WTS CV can help you prepare a CV that employers in the UAE and GCC want to see.
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FAQ
Do I get gratuity if I resign before one year?
No. You need at least one year of continuous service. You will still get your salary for days worked and pay for unused leave.
Is gratuity calculated on basic or gross salary?
On your last basic salary only. Allowances, overtime and bonuses are not included.
Will I lose gratuity if I resign after 2 years?
No. Under the current law, you get full gratuity for your service if you completed at least one year, even if you resign.
How many days does my employer have to pay my gratuity?
Your employer must pay all end-of-service dues within 14 days after your contract ends.
Can my employer deduct money from my gratuity?
Only money you legally owe the employer, such as a loan or salary advance. Ask for written proof of any deduction and complain to MOHRE if it looks wrong.
What number do I call for gratuity problems?
Call the MOHRE Labour Claims and Advisory Centre on toll-free 80084, or file a complaint using the MOHRE app or website.
Sources
- UAE Government Portal – Resolving labour disputes
- The National – UAE gratuity calculator
- Khaleej Times – How to calculate gratuity under the new labour law
- Gulf News – Grace period for changing unlimited contracts extended
- Khaleej Times – MOHRE Labour Claims and Advisory Centre (2026)
- Mondaq – Key amendments in Federal Decree-Law No. 9 of 2024
This article is general information, not legal advice. Rules can change, so always confirm your case with MOHRE or the relevant UAE authority.
