How UAE gratuity works

Set by Article 51 of Federal Decree-Law No. 33 of 2021 for private-sector expatriates.

  • Basic salary only. Housing, transport and other allowances do not count (Article 1).
  • 21 days a year for the first five years, 30 days a year after that. A day is basic ÷ 30 (Article 67).
  • One year minimum, then part years are paid pro rata. Unpaid absence does not count.
  • Resigning does not reduce it.
  • Capped at two years' wage and paid within 14 days of leaving (Article 53).

Examples

5 years on AED 10,000 basic

  1. Daily basic wage: AED 10,000 ÷ 30 = AED 333.33.
  2. Days of gratuity: 5 years × 21 days = 105 days.
  3. Total: 105 × AED 333.33.

Estimate: AED 35,000

8 years on AED 12,000 basic

  1. Daily basic wage: AED 12,000 ÷ 30 = AED 400.
  2. First five years: 5 × 21 = 105 days = AED 42,000.
  3. Next three years: 3 × 30 = 90 days = AED 36,000.
  4. Total: AED 42,000 + AED 36,000.

Estimate: AED 78,000

Who is covered

Covered

  • Full-time expatriates at private-sector employers under the federal labour law.

Not covered

  • Emiratis: paid under the pensions law through GPSSA instead (Article 51).
  • DIFC and ADGM: their own employment laws and end-of-service schemes (DEWS in DIFC).
  • Government staff and domestic workers: outside the federal labour law (Article 3).
  • Part-time contracts and the optional savings scheme: calculated differently.
  • GCC nationals: a pension scheme may apply instead. Check with your employer.

Questions

Do I lose gratuity if I resign?

No. Under the 2021 law, resigning does not reduce gratuity. You need at least one year of service.

Is gratuity on basic or total salary?

Basic only. Allowances such as housing and transport are left out (Articles 1 and 51).

Do I get gratuity for less than a year?

No. It starts after one year of continuous service. After that, part years count pro rata.

Does unpaid leave reduce my gratuity?

Yes. Days of unpaid absence are taken out of your service (Article 51).

What is the maximum gratuity?

Two years' wage (Article 51). This calculator caps at 24 months of basic salary, which only applies after about 25.5 years.

When must my employer pay?

Within 14 days of your contract ending, with your final wages (Article 53).

Related UAE guides

Sources