End-of-service gratuity is money your employer owes you when you leave a job in the UAE. Every employee who completes at least one year of service is entitled to it. Use the calculator above for a quick estimate, or read on to understand exactly how it is calculated.
Who Is Eligible for Gratuity in the UAE?
You qualify if you have completed at least one full year of continuous service with the same employer. Less than a year means no gratuity. It does not matter whether you resign or are terminated — the entitlement applies either way, with one exception: dismissal for serious misconduct under Article 44 of the UAE Labour Law can forfeit it.
The Gratuity Formula (UAE Labour Law)
Gratuity is calculated on your basic salary (not allowances, not total package):
- 1 to 5 years of service: 21 days of basic salary for each year
- More than 5 years: 30 days of basic salary for each year beyond the first five
The calculation:
- Daily wage = monthly basic salary ÷ 30
- First 5 years: daily wage × 21 × number of years
- Years beyond 5: daily wage × 30 × number of years
- Cap: total gratuity cannot exceed 2 years of basic salary
- Unpaid leave: days of unpaid leave are deducted from the service period
Worked Example
Ahmed earns a basic salary of AED 10,000 and worked for 7 years:
- Daily wage = 10,000 ÷ 30 = AED 333.33
- First 5 years: 333.33 × 21 × 5 = AED 35,000
- Remaining 2 years: 333.33 × 30 × 2 = AED 20,000
- Total gratuity: AED 55,000
21 Days vs 30 Days: The Rule Explained
The most common confusion is when the 30-day rate kicks in. It applies only to years after the fifth year — the first five years are always calculated at 21 days per year. So someone with 6 years gets 5 years at 21 days plus 1 year at 30 days.
Common Mistakes in Gratuity Calculation
- Using gross salary instead of basic salary — allowances are excluded by law
- Counting less than a year — no gratuity accrues before 12 months of service
- Ignoring unpaid leave — those days reduce the service period
- Forgetting the 2-year cap — very long service does not mean unlimited gratuity
Need assistance with payroll or end-of-service provisioning? FinApt's corporate services and HR advisory teams assist UAE businesses in structuring compliant employment contracts, payroll systems, and accurate statutory provisions.
Frequently Asked Questions
Divide your monthly basic salary by 30 to get the daily wage. Multiply by 21 days for each of the first 5 years of service, and by 30 days for each year beyond 5. The total cannot exceed 2 years of basic salary.
Basic salary only. Allowances such as housing, transport and bonuses are excluded from the calculation under UAE Labour Law.
Any employee who has completed at least one year of continuous service. Employees dismissed for serious misconduct under Article 44 may lose the entitlement.
For the first 5 years of service, gratuity accrues at 21 days of basic salary per year. For every year beyond 5, it accrues at 30 days per year.
Yes. Total end-of-service gratuity cannot exceed the equivalent of 2 years of basic salary, no matter how long the service.
Yes. Days of unpaid leave are deducted from the total service period before calculating gratuity.