UAE End-of-Service Gratuity Calculator
21 days of basic per year for the first five years, 30 days per year thereafter, capped at two years of basic salary. Resignation and termination both give the full gratuity under the 2022 labour law.
Last verified: 2026-06
Use the basic on your MOHRE contract, not the gross. Allowances are excluded by law.
Under the 2022 UAE labour law both resignation and termination give full gratuity for employees who complete the required notice. The old one-third and two-third reductions for short tenures no longer apply.
Estimated end-of-service gratuity
AED 55,000
Daily basic = monthly basic / 30 = AED 333 per day
| Period | Rate | Amount |
|---|---|---|
| Year 1 | 21 days | AED 7,000 |
| Year 2 | 21 days | AED 7,000 |
| Year 3 | 21 days | AED 7,000 |
| Year 4 | 21 days | AED 7,000 |
| Year 5 | 21 days | AED 7,000 |
| Year 6 | 30 days | AED 10,000 |
| Year 7 | 30 days | AED 10,000 |
| Subtotal | AED 55,000 | |
How UAE gratuity is calculated
UAE Federal Decree-Law No. 33 of 2021, in force from February 2022, sets the formula used in every private-sector end-of-service payout. The base is your basic monthly salary, divided by 30 to give a daily basic. For each of the first five years of service you earn 21 daily-basic units. From year six onward, every additional year earns 30 daily-basic units. The total is capped at 24 months of basic salary, which is the equivalent of two full years of pay.
The 2022 law also did away with the older reductions that used to apply to resignations under five years of service. Today, an employee who resigns after one year with the required notice receives the same daily-basic accrual as an employee who is terminated by the company. Only specific gross misconduct dismissals, listed in Article 44 of the law, can lead to forfeiture of gratuity. Partial years are calculated on a pro-rata basis: a tenure of 3 years and 6 months earns 3.5 times 21 daily-basic units.
A worked example
Take an employee with a basic monthly salary of AED 10,000 and 7 full years of service. Daily basic is AED 10,000 divided by 30, or AED 333.33. The first 5 years earn 5 times 21 days, that is 105 daily-basic units, worth AED 35,000. Years 6 and 7 earn 2 times 30 days, or 60 daily-basic units, worth AED 20,000. Total gratuity is AED 55,000. The cap kicks in only above roughly 17 years of service on this salary, so the cap is irrelevant here.
What gets included in basic salary
Only the basic salary line on your MOHRE contract counts. Housing allowance, transport allowance, education allowance, commission, bonuses and one-off payments are all excluded by law. This is the single biggest variable in the calculation: a worker on AED 25,000 total compensation with a basic of AED 10,000 will receive less than half the gratuity of a worker on the same total with a basic of AED 22,000. Always check the basic figure on your contract before you accept any company gratuity quote.
The numbers shown by this calculator are estimates. Specific scenarios such as free-zone employment, employment under the alternative end-of-service savings scheme launched in late 2023, or terminations under Article 44 of the labour law can change the result. Always confirm the final figure with MOHRE or a qualified labour lawyer before signing settlement papers. Numbers above are accurate against the labour-law framework as of June 2026. Read the full UAE work permit and labour law guide.
Frequently asked
How is UAE end-of-service gratuity calculated in 2026?
Under the 2022 UAE Federal Decree-Law No. 33 on labour relations, gratuity is 21 days of basic salary for each of the first 5 years of service and 30 days of basic salary for every year beyond 5. The daily basic is taken as monthly basic divided by 30. The total gratuity is capped at 2 years of basic salary, no matter how long the tenure.
Does resignation affect my UAE gratuity?
Under the 2022 labour law both resignation and termination give the employee the full gratuity calculation as long as the required notice period has been served. The old rule from the previous labour law that reduced gratuity to one-third or two-thirds for resignations under five years no longer applies for limited or unlimited contracts converted under the new law.
Is gratuity calculated on gross salary or basic salary?
Basic salary only. Allowances such as housing, transport, education and bonuses are excluded from the gratuity base by law. Always use the basic line printed on your MOHRE contract for an accurate figure. Many employers structure compensation so that basic salary is a smaller portion of total pay, which directly reduces the gratuity amount.
What is the maximum UAE gratuity payout?
The law caps total gratuity at 24 months of basic salary, no matter how many years you served. On a basic of AED 10,000 the maximum payout is AED 240,000. The cap kicks in around year 17 of service under the standard 21/30-day formula. Tenures above that point continue to qualify for unpaid leave and other benefits but the gratuity itself does not grow further.
When is the gratuity paid to me?
The UAE Wage Protection System and MOHRE require gratuity plus any unpaid wages, leave balances and notice-period dues to be settled within 14 days of the last working day. The employer transfers the gratuity through WPS or by cheque, alongside the cancellation of the labour card. Delays beyond 14 days can be reported to MOHRE through the labour complaints line and the case is opened automatically.