Calculate end-of-service gratuity under Federal Decree-Law No. 33 of 2021 (current UAE Labour Law). Instant, accurate, free.
UAE end-of-service gratuity is 21 days’ basic salary for each of the first 5 years of service, then 30 days’ basic salary for every year after 5, capped at 2 years’ basic salary. Only basic salary counts (allowances are excluded), and you must complete at least 1 year of service to qualify.
The UAE end-of-service gratuity is governed by Federal Decree-Law No. 33 of 2021, which came into effect on 2 February 2022. It replaced the old Labour Law (Federal Law No. 8 of 1980) and simplified gratuity rules significantly.
Any employee in the UAE private sector who has completed at least 1 year of continuous service is entitled to gratuity on leaving, regardless of whether they resign or are terminated.
| Years of service | Days of basic per year | Formula |
|---|---|---|
| Less than 1 year | 0 | No gratuity |
| 1 to 5 years | 21 calendar days | (Basic ÷ 30) × 21 × years |
| More than 5 years | 30 calendar days (for years beyond 5) | (Basic ÷ 30) × [(21 × 5) + 30 × (years − 5)] |
Maximum cap: Gratuity cannot exceed 2 years' basic salary (24 months), regardless of total years served.
Gratuity is calculated on basic salary only. Housing allowance, transport allowance, commissions, bonuses, overtime pay, or any other benefits are not included.
If your employee was on an old unlimited contract before February 2022 and resigned, the entitlement is reduced:
| Service length on resignation | Gratuity entitlement |
|---|---|
| 1 to 3 years | One-third (1/3) of full gratuity |
| 3 to 5 years | Two-thirds (2/3) of full gratuity |
| More than 5 years | Full gratuity |
If the employer terminates an unlimited contract, full gratuity is always owed regardless of years served.
Under the 2022 reform, all employment contracts must be limited (fixed-term, renewable). Employees on these contracts receive full gratuity whether they resign or are terminated. No reduction applies.
Under Federal Decree-Law No. 33 of 2021, you earn 21 calendar days’ basic salary for each of the first 5 years of service and 30 calendar days’ basic salary for each year after 5. It is based on basic salary only and capped at 2 years’ basic pay. You need at least 1 full year of service to qualify.
Gratuity is calculated on basic salary only. Housing, transport, commissions and any other allowances are excluded, even if they make up most of the package.
The maximum gratuity is equivalent to 2 years’ basic salary (24 months), no matter how many years the employee has worked.
Yes. Under the 2022 reform (Federal Decree-Law No. 33 of 2021) all new contracts are limited (fixed-term), and employees receive full gratuity whether they resign or are terminated, provided they have completed at least 1 year of service.
If an employee leaves or is terminated during probation (maximum 6 months under the 2022 law), no gratuity is payable because the 1-year minimum has not been reached.
No. There is no personal income tax in the UAE, so gratuity is received in full by the employee.
An employer can only deduct from gratuity if a court order permits it, for example to recover a proven debt. Employers cannot unilaterally reduce gratuity.
Gratuity is separate from WPS. WPS covers monthly salaries; gratuity is a one-time end-of-service payment. Consistent WPS history is, however, used by MOHRE to establish the last basic salary in disputes.
Last reviewed 2026-06-30. Wurxa keeps these tools aligned with current UAE Labour Law and MOHRE guidance. For binding advice on a specific case, consult a licensed UAE labour-law professional.
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