UAE End of Service Gratuity: How It Is Calculated

Under the UAE Labour Law (Federal Decree-Law No. 33 of 2021), any employee who completes at least one full year of continuous service is owed an end-of-service gratuity when their employment ends.

The gratuity is based on basic salary only — not allowances. You earn 21 days of basic pay for each of the first five years of service, and 30 days of basic pay for each year beyond five years.

For partial years after the first, gratuity is paid pro-rata. The total gratuity is capped at the equivalent of two years' total pay.

An employee who resigns is entitled to the full gratuity, the same as one whose contract ends — the old rule that cut gratuity for early resignation was removed under the 2021 law.

Gratuity can be reduced or lost only in narrow cases of gross misconduct defined in the law. Employers must pay the final settlement, including gratuity, within 14 days of the employment ending.