How gratuity works in the UAE
End-of-service gratuity is a one-time payment for non-UAE national employees in the private sector. It is set out in Article 51 of Federal Decree-Law No. 33 of 2021. You qualify once you complete one year of continuous service.
- 21 days of basic salary for each of the first five years.
- 30 days of basic salary for each year after the fifth.
- Part years are paid pro rata.
- The total cannot be more than two years of salary.
- Days of unpaid absence are not counted as service.
The formula
Daily basic wage = monthly basic salary ÷ 30
Gratuity = daily wage × (21 × years up to 5) + daily wage × (30 × years above 5)
Example: 7 years of service
Basic salary AED 4,500, so the daily wage is AED 150.
- First 5 years: 5 × 21 × 150 = AED 15,750
- Next 2 years: 2 × 30 × 150 = AED 9,000
Total gratuity: AED 24,750
Resignation no longer reduces gratuity
Under the old 1980 labour law, employees who resigned early received only a third or two thirds of their gratuity. The 2021 law removed these reductions, so from 2 February 2022 the full amount applies whether you resign or are terminated, as long as you have completed one year.
Gratuity is based on your last basic salary
The calculation uses the basic wage you were earning at the end of your service, not your average. Allowances such as housing, transport or phone are excluded unless your contract says otherwise. If your basic salary is low compared with your total package, your gratuity will be low too, so check this when you negotiate a contract.
Frequently asked questions
How many days of gratuity do I get per year in the UAE?
21 days of basic salary for each of the first five years and 30 days for each year after that.
Do I get gratuity if I worked less than one year?
No. Article 51 requires at least one year of continuous service.
Is there a maximum gratuity amount?
Yes. Total gratuity cannot exceed two years of wage (24 months of basic salary).
Does unpaid leave affect gratuity?
Yes. Days of unpaid absence are not counted as service, so they reduce the years used in the calculation.
Do UAE nationals receive gratuity?
UAE nationals in the private sector are generally covered by the pension system instead of the gratuity in Article 51.