UAE End of Service Gratuity 2025: Calculation Guide with Worked Examples

Quick Answer
UAE end-of-service gratuity is calculated under Article 51 of Federal Decree-Law No. 33 of 2021 on the employee’s last drawn basic salary only. The rate is 21 calendar days per year for years 1 to 5, then 30 calendar days per year from year 6 onward. Gratuity is payable after 1 full year of continuous service. Total gratuity must not exceed 2 years of basic salary. Use the calculator below to get your exact figure.

UAE Gratuity Calculator 2025

Calculate Your End-of-Service Gratuity

Based on Article 51, Federal Decree-Law No. 33 of 2021. Enter your last drawn basic monthly salary and total years of service.



Please enter a valid salary and at least 1 year of service to calculate gratuity.

Your Gratuity Breakdown — Article 51

Monthly basic salary
Daily rate (basic ÷ 30)
Tier 1 (Years 1–5) amount
Tier 2 (Year 6+) amount
Total Gratuity Payable

Federal Decree-Law No. 33 of 2021 · Article 51

The Governing Law — Article 51

UAE end-of-service gratuity is a statutory entitlement under Article 51 of UAE Federal Decree-Law No. 33 of 2021 Regulating Labour Relations (the New Labour Law), which replaced Federal Law No. 8 of 1980 effective February 2, 2022. Every employee in UAE private sector mainland employment who completes one full year of continuous service earns a gratuity entitlement. The employer must pay gratuity on the last working day or within a reasonable period after the employment ends.

Common Employer Error: Gratuity must be calculated on basic salary only — not total package. Housing allowance, transport allowance, bonuses, and commissions are excluded. An employee earning AED 30,000 total package with AED 18,000 basic — gratuity is calculated on AED 18,000 only.

Gratuity Accrual Rates — Two Tiers

21
Calendar days per year
Years 1 to 5 of service
30
Calendar days per year
Year 6 onward
Service Period Accrual Rate Calculation Base Article
Year 1 to Year 5 21 calendar days per year of basic salary Last drawn basic salary Article 51
Year 6 onward 30 calendar days per year of basic salary Last drawn basic salary Article 51
Total cap Must not exceed 24 months of basic salary Last drawn basic salary Article 51

Step-by-Step Calculation Formula

UAE Gratuity Formula — Article 51, Federal Decree-Law No. 33 of 2021

Step 1: Daily Rate = Monthly Basic Salary ÷ 30
Step 2: Tier 1 Amount = Daily Rate × 21 × (years served, up to 5)
Step 3: Tier 2 Amount = Daily Rate × 30 × (years served beyond 5)
Step 4: Total Gratuity = Tier 1 + Tier 2
Step 5: Cap Check — Total must not exceed Monthly Basic × 24

Worked Examples — 9 Scenarios

Salary Level 1 — AED 15,000 Monthly Basic

Example 1A — 2 Years of Service

Daily rate: AED 15,000 ÷ 30AED 500
Tier 1: AED 500 × 21 days × 2 yearsAED 21,000
Tier 2: Not applicable (under 5 years)AED 0
Total Gratuity PayableAED 21,000

Example 1B — 5 Years of Service

Daily rate: AED 15,000 ÷ 30AED 500
Tier 1: AED 500 × 21 days × 5 yearsAED 52,500
Tier 2: Not applicable (exactly 5 years)AED 0
Total Gratuity PayableAED 52,500

Example 1C — 8 Years of Service

Daily rate: AED 15,000 ÷ 30AED 500
Tier 1: AED 500 × 21 days × 5 yearsAED 52,500
Tier 2: AED 500 × 30 days × 3 yearsAED 45,000
Total Gratuity PayableAED 97,500

Salary Level 2 — AED 30,000 Monthly Basic

Example 2A — 2 Years of Service

Daily rate: AED 30,000 ÷ 30AED 1,000
Tier 1: AED 1,000 × 21 days × 2 yearsAED 42,000
Total Gratuity PayableAED 42,000

Example 2B — 5 Years of Service

Daily rate: AED 30,000 ÷ 30AED 1,000
Tier 1: AED 1,000 × 21 days × 5 yearsAED 105,000
Total Gratuity PayableAED 105,000

Example 2C — 8 Years of Service

Daily rate: AED 30,000 ÷ 30AED 1,000
Tier 1: AED 1,000 × 21 days × 5 yearsAED 105,000
Tier 2: AED 1,000 × 30 days × 3 yearsAED 90,000
Total Gratuity PayableAED 195,000

Salary Level 3 — AED 60,000 Monthly Basic

Example 3A — 2 Years of Service

Daily rate: AED 60,000 ÷ 30AED 2,000
Tier 1: AED 2,000 × 21 days × 2 yearsAED 84,000
Total Gratuity PayableAED 84,000

Example 3B — 5 Years of Service

Daily rate: AED 60,000 ÷ 30AED 2,000
Tier 1: AED 2,000 × 21 days × 5 yearsAED 210,000
Total Gratuity PayableAED 210,000

Example 3C — 8 Years of Service

Daily rate: AED 60,000 ÷ 30AED 2,000
Tier 1: AED 2,000 × 21 days × 5 yearsAED 210,000
Tier 2: AED 2,000 × 30 days × 3 yearsAED 180,000
Total Gratuity PayableAED 390,000

Quick Reference Table — All 9 Scenarios

Monthly Basic 2 Years 5 Years 8 Years
AED 15,000 AED 21,000 AED 52,500 AED 97,500
AED 30,000 AED 42,000 AED 105,000 AED 195,000
AED 60,000 AED 84,000 AED 210,000 AED 390,000

Partial Year and Pro-Rata Gratuity

Where an employee completes more than one full year but the final year is incomplete, the partial year is calculated proportionally. Multiply the daily rate by 21 (Tier 1) or 30 (Tier 2), then by the number of days in the partial year, divided by 365. Both resignation and termination qualify for partial year gratuity after the first completed year.

Key Change Under the 2021 Law: The old rule capped resignation gratuity at one-third or two-thirds based on service length. The 2021 law abolished this. Employees who resign after completing 1 year now receive the same full gratuity as terminated employees.

Resignation vs Termination — Same Treatment Since February 2022

Scenario Under Old Law (pre-2022) Under FL 33/2021 (from Feb 2022)
Resignation — 1 to 3 years service One-third of full gratuity Full gratuity entitlement
Resignation — 3 to 5 years service Two-thirds of full gratuity Full gratuity entitlement
Resignation — 5 years or more Full gratuity Full gratuity entitlement
Termination — all durations Full gratuity Full gratuity entitlement

Gratuity Forfeiture — Article 44

An employer may withhold gratuity only when terminating under Article 44 of Federal Decree-Law No. 33 of 2021. Article 44 grounds include assault on a colleague or manager, serious policy breaches, and disclosure of confidential information. The employer must follow the full Article 44 disciplinary process. Withholding gratuity without a valid Article 44 basis exposes the employer to MoHRE complaint and civil liability.

Risk Warning: Never withhold gratuity as leverage over an outstanding debt or dispute. A loan deduction requires a written loan agreement signed by both parties. Unilateral withholding is an unlawful deduction under the 2021 law.

DIFC DEWS vs Mainland Gratuity Lump Sum

Factor Mainland UAE (Article 51) DIFC (DEWS Scheme)
Payment model Lump sum on last working day Monthly contribution to savings plan
Governing law Federal Decree-Law No. 33 of 2021 DIFC Employment Law No. 2 of 2019
Employer cash flow impact Large lump sum risk at exit — must be provisioned Predictable fixed monthly cost
Employee portability Paid on last working day Vested in employee savings account
Calculation base Last drawn basic salary Monthly salary — employer sets contribution rate

Employer Provisioning Guide

7%Annual gratuity cost as % of basic salary in Years 1–5
AED 1,750Monthly provision for AED 30,000 basic salary employee
21 DaysArticle 51 accrual rate for first 5 years of service
1 YearMinimum continuous service to qualify for any gratuity

To provision monthly: divide the annual gratuity accrual by 12. For an employee on AED 30,000 basic — AED 1,000 daily rate × 21 days = AED 21,000 annual accrual ÷ 12 = AED 1,750 per month to set aside. Employers who provision monthly eliminate the cash flow risk of large exit payments when multiple long-tenure staff leave in the same period.

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Frequently Asked Questions

What is the UAE end-of-service gratuity rate for employees with under 5 years of service?

21 calendar days of basic salary per year under Article 51 of Federal Decree-Law No. 33 of 2021. The base is the last drawn basic salary only. Allowances, bonuses, and commissions are excluded.

Does the gratuity rate change after 5 years of UAE service?

Yes. From year 6 onward the rate increases to 30 calendar days of basic salary per year under Article 51. Years 1 to 5 remain at 21 days per year. Total gratuity = Tier 1 + Tier 2 across the full service period.

Is UAE gratuity calculated on basic salary or total package?

Basic salary only, under Article 51. Housing allowance, transport allowance, and all other package components are excluded. An employee on AED 40,000 total package with AED 25,000 basic — gratuity is calculated on AED 25,000 only.

Do employees who resign still get full gratuity under the 2021 law?

Yes. The 2021 law abolished the old rule that capped resignation gratuity at one-third or two-thirds. After 1 full year of service, employees who resign receive the same full gratuity as terminated employees.

How does UAE gratuity work for DIFC companies?

DIFC employers do not pay a gratuity lump sum. They contribute monthly to the DIFC Employee Workplace Savings (DEWS) scheme under DIFC Employment Law No. 2 of 2019. The contribution is vested in the employee's savings account throughout employment.

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