Who is entitled to gratuity in the UAE?
Article 51 of Federal Decree-Law No. 33 of 2021 – the UAE Labour Law that took effect in February 2022 – gives end-of-service gratuity to foreign employees in the private sector on the UAE mainland. The only condition is that you have completed at least one year of continuous service with the same employer.
It does not matter whether your contract ended because you resigned, because the employer terminated it, or because a contract simply expired. The 2021 law removed the old distinction between limited and unlimited contracts and the resignation reductions that came with it.
- UAE nationals are covered by the pension system run by the General Pension and Social Security Authority (GPSSA), not by gratuity.
- Employees in the DIFC and ADGM financial free zones follow their own employment laws (for example, the DIFC’s DEWS savings scheme).
- Domestic workers are covered by a separate law – see our guide on domestic workers’ end-of-service.
Step 1: Work out your service period
Count from your first working day to your last working day. Whole years are counted as full years, and the remaining days are a fraction of a year. Days of absence without pay – for example unpaid leave – are not counted as service, so subtract them.
If, after subtracting unpaid days, your continuous service is less than one year, no gratuity is due by law.
Step 2: Find your daily basic wage
UAE gratuity is calculated on your last basic salary only, as stated in your employment contract. Housing, transport, telephone and other allowances are excluded, as are commissions and bonuses, unless your contract says otherwise.
To convert the monthly basic salary into a daily wage, divide it by 30.
Example: a basic salary of AED 9,000 gives a daily wage of AED 300.
Step 3: Apply the 21-day and 30-day rates
- For each of the first five years of service: 21 days of basic wage.
- For each year after the fifth: 30 days of basic wage.
- Part years are paid in proportion – for example, half a year earns half the annual amount – as long as you completed the first full year.
Daily wage: AED 300.00 (monthly ÷ 30)
- 3 yrs × 21 days/yrAED 18,900.00
- Estimated entitlementAED 18,900.00
Daily wage: AED 400.00 (monthly ÷ 30)
- 5 yrs × 21 days/yrAED 42,000.00
- 3 yrs × 30 days/yrAED 36,000.00
- Estimated entitlementAED 78,000.00
Step 4: Check the two-year cap
The total gratuity cannot exceed two years’ wage. In practice this only matters for very long service: with 21 days for the first five years and 30 days after that, you only reach the ceiling after more than 25 years with the same employer.
Step 5: Deductions and payment
The employer may deduct amounts you legally owe it – for example an unpaid loan or advance. It must pay your gratuity and all other dues within 14 days of the end of the contract.
Gratuity is separate from your other final-settlement items. Unused annual leave, salary for the last month and notice-period pay (if notice was not worked) are paid on top of gratuity, not out of it.
Common questions about specific situations
Does resigning reduce my gratuity?
No. Under the 2021 law, the gratuity is the same whether you resign or are terminated, provided you completed one year.
What if my basic salary is very low compared with my total package?
Gratuity still uses the basic salary in the contract. Some employers structure packages with a low basic salary, which reduces gratuity. Check your contract and offer letter carefully – they decide the figure.
I worked for a federal government entity. Is it the same?
For non-national employees of federal entities, Decree-Law No. 47 of 2021 aligned the formula with the private sector from 2 February 2022. Emirate-level governments such as Dubai, Abu Dhabi and Sharjah have their own HR laws.
Quick checklist before you sign your final settlement
- Is the service period correct, and were only genuinely unpaid days removed?
- Was the gratuity calculated on the basic salary in your latest contract?
- Are leave encashment and last salary listed separately from gratuity?
- Are any deductions explained in writing?
- Was the payment made within 14 days?
If something does not add up, raise it with your employer first, and if it is not resolved, file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE) through its website, app or call centre.
Questions
How many days of gratuity do I get per year in the UAE?
21 days of basic wage for each of the first five years, and 30 days for each year after that.
Is gratuity paid if I worked 11 months?
No. You need at least one year of continuous service.
How long does the employer have to pay?
14 days from the end of the employment contract.