UAE End-of-Service Gratuity Explained (2026): How It's Calculated

This is general information, not legal advice. Check your contract and the Ministry of Human Resources and Emiratisation (MOHRE) for your situation.

The end-of-service gratuity is a lump sum UAE employers must pay private-sector employees when their employment ends. It's set by Federal Decree-Law No. 33 of 2021, the UAE Labour Law, which took effect in February 2022. For many expatriates it's one of the largest single payments they receive, so it's worth understanding.

Who is entitled?

• Employees in the private sector on the UAE mainland (and most free zones that follow federal labour law), working full time.
• You need at least one year of continuous service. Below that, no gratuity is due.
• UAE nationals are covered by pension and social security rules instead.
• The DIFC and ADGM have their own employment laws and end-of-service schemes.
• Employers can opt into a government-approved savings scheme; employees covered by it receive their savings instead of the traditional gratuity.

How it's calculated

1. Find your basic salary. Use your last basic monthly salary — not housing, transport, phone or other allowances.
2. Count your service. Use full years plus the fraction of the final year. Days of unpaid leave don't count.
3. Apply the days:

• 21 days of basic salary for each of the first five years.
• 30 days of basic salary for each year after five.

4. Apply the cap. The total can't exceed two years of basic salary.

A day's wage is commonly calculated as monthly basic salary ÷ 30.

Worked examples

Example 1: three years, AED 6,000 basic

• 3 years × 21 days = 63 days
• Daily wage: 6,000 ÷ 30 = AED 200
• Gratuity: 63 × 200 = AED 12,600

Example 2: seven years, AED 8,000 basic

• First 5 years: 5 × 21 = 105 days
• Next 2 years: 2 × 30 = 60 days
• Total: 165 days × (8,000 ÷ 30) = AED 44,000

Example 3: 18 months, AED 10,000 basic

• 1.5 years × 21 days = 31.5 days
• Gratuity: 31.5 × 333.33 = AED 10,500

You can check your own figure with our UAE gratuity calculator.

What if you resign?

Under the old law, employees who resigned early lost part of their gratuity. The 2021 law removed those reductions: if you have completed at least a year of continuous service, you're entitled to gratuity whether you resign or your employer ends the contract. Your employer may still deduct money you owe them, such as an unpaid loan.

When must it be paid?

All end-of-service dues, including gratuity, unpaid salary and accrued leave, should be paid within 14 days of the end of the contract. If they aren't, you can file a complaint with MOHRE.

Part-time work

Part-time employees receive a gratuity in proportion to their hours compared with full-time hours.

Common mistakes

• Using your total salary. Allowances don't count. A low basic salary means a lower gratuity, which is why it's worth checking the split when you negotiate a job offer.
• Forgetting unpaid leave. Long unpaid absences reduce your service period.
• Assuming free-zone rules match the mainland. DIFC and ADGM employees follow different schemes.
• Not checking the final settlement. Ask for a written breakdown of gratuity, leave and final salary.

The bottom line

Your UAE gratuity depends on three things: your last basic salary, your years of service and the 21/30-day formula. Know these numbers before you resign or sign a settlement, and ask for a written calculation.

Related guides

• UAE Annual Leave and Notice Period Explained (2026): Your Rights in the Private Sector
• How to Open a Bank Account in the UAE or Saudi Arabia as an Expat (2026)
• How to Send Money Home From the Gulf Without Losing It in Fees

Sources

• UAE Government portal (u.ae): End of service benefits for employees in the private sector
• Ministry of Human Resources and Emiratisation (MOHRE)
• Gulf News: UAE gratuity calculation guide