How it's calculated
Full-time private-sector employees in the UAE who complete at least one year of continuous service are entitled to an end-of-service gratuity when their service ends. Under Article 51 of Federal Decree-Law No. 33 of 2021 it is 21 days' basic wage for each of the first five years and 30 days' basic wage for each year after, in proportion for part years, up to a maximum of two years' wage.u.ae
The formula
Daily wage = monthly basic ÷ 30 (or monthly basic × 12 ÷ 365)
Gratuity = daily wage × (21 × min(years, 5) + 30 × max(years − 5, 0)), capped at 24 months' basic wage
Years of service exclude days of unpaid absence.
Worked example
After 5 years on a basic salary of AED 10,000 a month, the gratuity is AED 35,000: 105 days at AED 333.33 a day.
| Line | Amount |
|---|---|
| Daily basic wage (basic ÷ 30) | AED 333.33 |
| First 5 years × 21 days = 105 days | AED 35,000 |
| Gratuity | AED 35,000 |
| With the daily wage as basic × 12 ÷ 365 | AED 34,521 |
After 8 years and 6 months on the same basic salary it is AED 70,000, and after 30 years it reaches the cap of AED 240,000.
Assumptions and limitations
- Basic wage only, as the law requires: allowances are excluded.
- Daily wage: the law doesn't fix the divisor, so choose ÷ 30 or × 12 ÷ 365 to match your employer.
- Full-time private-sector employees. Part-time workers get a share in proportion to their hours; UAE nationals are covered by the pension legislation instead (Art. 51(1)), and some free zones have their own employment laws.
- Deductions: your employer may deduct amounts due under the law or a court judgment (Art. 51(7)); these are not included.