UAE Gratuity (End of Service) — How to Calculate Yours
The exact formula, when you qualify, and what happens if you resign vs are terminated.
What is Gratuity?
UAE Labour Law (Federal Decree Law No. 33 of 2021) entitles every employee who completes 1+ year of service to an End of Service Gratuity (EOSG) payment upon leaving.
The Calculation Formula
Basic salary only — allowances (housing, transport, etc.) are not included.
For the first 5 years:
- •21 days of basic salary per year of service
After 5 years:
- •30 days of basic salary per year of service (for years beyond 5)
Maximum gratuity: Cannot exceed 2 years' total basic salary.
Example Calculation
Employee: 7 years service, basic salary AED 10,000/month
- •First 5 years: 5 × 21 days = 105 days
- •Next 2 years: 2 × 30 days = 60 days
- •Total: 165 days of daily basic salary
Daily basic = AED 10,000 / 30 = AED 333.33
Gratuity = 165 × AED 333.33 = AED 55,000
Use our Gratuity Calculator to calculate yours instantly.
Resign vs Terminated: Does it Matter?
Under the new 2022 Labour Law: Both resignation and termination generally qualify for full gratuity after 1+ year. The old rules that reduced gratuity for resignation no longer apply for most private sector contracts.
Exception: If you're dismissed for gross misconduct (Article 44), you may forfeit gratuity. Always get termination reasons in writing.
Tips to Protect Your Gratuity
1. Never waive your gratuity — any contract clause waiving EOSG is null and void under UAE law
2. Get it in writing — your employment contract must state your basic salary separately
3. File a complaint at MoHRE (mohre.gov.ae) if unpaid within 14 days of leaving
4. Unpaid gratuity accrues 12% annual interest if employer delays