Gratuity is a lump sum your employer pays when your job ends. It rewards you for your years of service. In the UAE it is often called “end-of-service benefit”.
This guide covers expat workers in the private sector under the UAE Labour Law (Federal Decree-Law No. 33 of 2021). The rules come from Article 51 of that law and the official u.ae page, last updated in October 2026.
Who gets gratuity
You get gratuity if:
- You work in the private sector, with a contract registered with MoHRE (the Ministry of Human Resources and Emiratisation).
- You completed at least one year of continuous service with the same employer.
You do not get gratuity if:
- You worked less than one year.
- You are a UAE national. Emiratis follow the pension and social security rules instead.
- You are a temporary worker on a contract under one year.
Domestic workers and free zones such as DIFC have their own rules. This guide does not cover them.
The formula
| Years of service | Gratuity per year |
|---|---|
| Years 1 to 5 | 21 days of basic salary |
| Each year after year 5 | 30 days of basic salary |
| Part of a year (after the first full year) | Paid pro rata, for the part worked |
| Maximum total | 2 years of wages |
Three rules make a big difference:
- Basic salary only. Allowances for housing, transport, utilities and furniture are left out. If your basic salary is low and your allowances are high, your gratuity is low.
- Unpaid days do not count. Days of unpaid absence are taken off your service time.
- There is a cap. Your total gratuity cannot be more than 2 years of wages.
Tip: Before you accept a job, check how much of the salary is “basic”. AED 3,000 basic plus AED 1,000 allowance gives more gratuity than AED 2,000 basic plus AED 2,000 allowance.
How to work out your daily wage
The formula counts in days. So you need a daily wage first.
In the examples below we divide the monthly basic salary by 30. This is the method used in most published calculators, such as the one from Khaleej Times. Your employer’s figure may be slightly different. Check it against your final settlement.
Daily wage = monthly basic salary ÷ 30
Worked example 1: a driver with 3 years
Ahmed works as a driver. His basic salary is AED 2,000 a month. He also gets AED 500 for food, but that does not count. He worked 3 full years.
| Step | Working | Result |
|---|---|---|
| Daily wage | 2,000 ÷ 30 | AED 66.67 |
| Days earned | 3 years × 21 days | 63 days |
| Gratuity | 63 × 66.67 | about AED 4,200 |
Ahmed’s gratuity is about AED 4,200. It is well below the cap.
Worked example 2: an accountant with 7 years and 6 months
Maria works as an accountant. Her basic salary is AED 6,000 a month. She worked 7 years and 6 months.
| Step | Working | Result |
|---|---|---|
| Daily wage | 6,000 ÷ 30 | AED 200 |
| First 5 years | 5 × 21 days | 105 days |
| Remaining 2.5 years | 2.5 × 30 days | 75 days |
| Total days | 105 + 75 | 180 days |
| Gratuity | 180 × 200 | AED 36,000 |
The cap is 2 years of wages: 6,000 × 24 = AED 144,000. Maria’s gratuity is far below it. She receives AED 36,000.
When it must be paid
Your employer must pay all your dues within 14 days after your contract ends. Dues include:
- Gratuity
- Any unpaid salary
- Pay for unused annual leave
- Any other money owed under the contract
The employer may deduct money you legally owe them, such as an advance. Ask for a written breakdown of every deduction.
Warning: Do not sign a final settlement or “full and final” letter until the money is in your bank account. Once you sign, it is harder to claim more.
Does resigning reduce gratuity?
Under the old labour law, workers who resigned early got a reduced gratuity. The current law does not use that reduction. The official u.ae page gives one formula for all full-time workers, whether they resign or are let go. You still need one full year of service.
The savings scheme option
Since 2023, employers can choose a voluntary end-of-service savings scheme instead of the lump-sum gratuity. Under it:
- The employer pays 5.83% of your basic salary into a fund each month if you have less than 5 years of service.
- After 5 years, it pays 8.33% each month.
- You can add your own money too, up to 25% of your monthly wage.
- The fund pays your balance plus any returns within 14 days after your job ends.
If your employer joins, it must settle the gratuity you earned before joining. Ask HR in writing if you are not sure which system you are in.
If your employer does not pay
- Ask HR in writing for your settlement and its breakdown.
- If they do not pay within 14 days, file a complaint with MoHRE through its app, website or call centre.
- MoHRE tries to settle it. If that fails, the case goes to court.
Read our UAE labour law basics for notice periods and other rights. If you lost your job, check whether you can claim ILOE unemployment insurance.
Leaving the UAE after your job ends? Our sister site has a checklist for leaving Dubai.
