How is gratuity calculated in UAE?

For the first 5 years, you get 21 days of basic salary per year. After 5 years, you get 30 days of basic salary for each additional year. The total gratuity cannot exceed 2 years of total salary.

Do I get gratuity if I resign in UAE?

Yes. Under the 2021 Labour Law, employees who resign receive full gratuity based on their years of service. There is no longer a reduction for resignation as existed under the old law.

What is the minimum service period for gratuity in UAE?

You must complete at least 1 year of continuous service to be eligible for end-of-service gratuity in the UAE.

UAE Gratuity Calculator 2026: How to Calculate End-of-Service Benefits

End-of-service gratuity is one of the most important financial rights for employees in the UAE. Whether you're planning to leave your job or just want to understand what you're entitled to, this guide covers everything under the current Federal Decree-Law No. 33 of 2021.

What Is End-of-Service Gratuity?

Gratuity is a lump-sum payment your employer must pay you when your employment ends, provided you've completed at least one year of continuous service. It's calculated based on your basic salary (not total salary — excludes allowances, commissions, and bonuses).

The Gratuity Calculation Formula

Under UAE labour law, gratuity is calculated as follows:

First 5 years: 21 calendar days of basic salary per year of service
After 5 years: 30 calendar days of basic salary for each additional year
Cap: Total gratuity cannot exceed the equivalent of 2 years' total salary

For partial years (after the first complete year), gratuity is calculated proportionally.

Example Calculation

Let's say your basic monthly salary is AED 10,000 and you've worked for 7 years:

Daily wage: AED 10,000 ÷ 30 = AED 333.33
First 5 years: 21 × 333.33 × 5 = AED 35,000
Next 2 years: 30 × 333.33 × 2 = AED 20,000
Total gratuity: AED 55,000

Key Changes Under the 2021 Labour Law

The new law (effective February 2022) made several important changes:

No more unlimited contracts — all contracts are now fixed-term (up to 3 years, renewable)
No gratuity reduction for resignation — under the old law, resigning employees received reduced gratuity. This is no longer the case
Same formula for all endings — whether you resign, are terminated, or your contract expires, the gratuity calculation is the same

When Employers Can Reduce or Deny Gratuity

Your employer can only deny gratuity in very limited circumstances:

Less than 1 year of continuous service
Termination for gross misconduct under Article 44 (theft, assault, disclosure of secrets, etc.)

If you're dismissed for misconduct, you lose your entire gratuity — but your employer must follow proper procedures and the burden of proof is on them.

When Must Gratuity Be Paid?

Your employer must pay your gratuity within 14 days of your last working day. If they fail to do so, you can file a complaint with MOHRE (Ministry of Human Resources and Emiratisation).

Calculate Your Gratuity Now

Use RentShield's free gratuity calculator to instantly calculate your end-of-service benefits. Just enter your basic salary, start date, and contract type.