How is end-of-service gratuity in the UAE calculated? Rules in plain English

By FastBuySale Newsroom · 5/11/2026 · قبل 24 د · AR EN

Who is entitled to end-of-service gratuity?

End-of-service gratuity in the UAE is the lump sum most expatriate private-sector employees receive when their employment ends. In plain English: if you've completed at least one year of continuous service, you're entitled to 21 days' basic salary for each of your first five years, and 30 days' basic salary for each year after that, with the total capped at two years' wage. Your employer must pay it, along with outstanding wages and other entitlements, within 14 days of the contract ending.

These rules come from Article 51 of Federal Decree Law No. 33 of 2021, the UAE Labour Law, as summarised on the UAE government's official portal. UAE nationals in the private sector are covered instead by the legislation on pensions and social security.

The official portal says a full-time worker who has completed at least one year of continuous service is entitled to gratuity upon termination. If you've served less than one year, you are not entitled to any gratuity pay.

Days of unpaid absence are not counted as service. So if you took unpaid leave, your service period for gratuity purposes is shorter than the calendar time between your start and end dates.

Once you've passed one year, fractions of a year count too. You're entitled to gratuity for part-years in proportion to the time served, so leaving after three and a half years means gratuity for three and a half years, not three.

For part-time and other work models, Article 30 of Cabinet Resolution No. 1 of 2022 sets a pro-rata approach: divide the working hours in your contract per year by full-time hours per year and multiply by 100 to get a percentage, then apply that percentage to the full-time gratuity. Gratuity does not apply to temporary work lasting less than one year.

Readers evaluating End-of-service gratuity should separate marketing claims from the actual rule text that governs their account or product. When two summaries disagree, the governing document or statute wins. If a rule depends on your age, filing status, or income band, re-check it when any of those facts change. Life events quietly move people across thresholds they last reviewed years earlier.

Educational explainers like this one cannot replace personalized advice for complex situations such as divorce orders, inherited accounts, or cross-border tax residency. Escalate those cases to a qualified professional. When in doubt about a number that changes every year, describe your plan qualitatively first, then look up the current official figure for the tax year you care about before you act.

How to calculate your gratuity

Step 1: find your last basic salary. The portal says gratuity is calculated on the last wage you were entitled to, namely the basic salary, excluding allowances.

Step 2: count your years of continuous service, excluding unpaid absence. For service of more than one year but less than five years, you get 21 days' salary for each year of work. For service beyond five years, you get 30 days' salary for each year after the first five.

Step 3: add it up. For example, three years of service gives 3 x 21 = 63 days' basic salary. Seven years gives 5 x 21 = 105 days for the first five years, plus 2 x 30 = 60 days for the next two, a total of 165 days' basic salary.

Step 4: apply the cap. In all cases, the total gratuity cannot exceed two years' wage. Long-serving employees should check whether they've reached this ceiling, because once the cap applies, additional years of service no longer increase the gratuity.

Our helps you separate basic pay from allowances when reviewing your contract, and the is handy for working out pro-rata amounts for part-time contracts.

A useful habit is to write down your goal, time horizon, and cash buffer before you change any election related to End-of-service gratuity. Decisions made during a stressful week are the ones people reverse later at a cost. Educational explainers like this one cannot replace personalized advice for complex situations such as divorce orders, inherited accounts, or cross-border tax residency. Escalate those cases to a qualified professional.

Compare fees the same way you would compare two similar listings before you buy: look at what you pay each year, what you get, and whether a simpler option meets the same need. Readers evaluating End-of-service gratuity should separate marketing claims from the actual rule text that governs their account or product. When two summaries disagree, the governing document or statute wins.

Payment deadlines and deductions

Employers must pay all outstanding wages, other entitlements and gratuity within 14 days of the termination of the contract, according to the official portal. Keep a copy of your contract, payslips and your final settlement so you can check the figures. Before your last day, it helps to write down your start date, any periods of unpaid leave and your current basic salary, then do the calculation yourself so you can compare it line by line with what your employer offers.

Employers may deduct from the gratuity any amounts the worker owes them. If a deduction is made, ask for a written breakdown of what it covers.

If you believe your gratuity has been calculated wrongly or not paid, the Ministry of Human Resources and Emiratisation (MoHRE) handles labour complaints. Raise the issue with your employer first and keep records of all correspondence.

Plan ahead for the gap between jobs. Gratuity is a one-off payment, so it's worth thinking about how it fits with an emergency fund and other protection such as the unemployment insurance scheme. Our shows how a lump sum could grow if saved.

Keep digital and paper copies of confirmations after every change. Screenshots of election pages, email receipts, and year-end statements make tax season and job changes far less chaotic. Compare fees the same way you would compare two similar listings before you buy: look at what you pay each year, what you get, and whether a simpler option meets the same need.

The voluntary Savings Scheme: an alternative to traditional gratuity

MoHRE has launched a voluntary alternative end-of-service benefits system, known as the Savings Scheme. Instead of paying a lump sum at the end, participating employers contribute monthly to an approved investment fund, aiming to protect employees from inflation, employer insolvency and bankruptcy.

For full-time employees, employers contribute 5.83% of the monthly basic salary if the employee has not completed five years of service, and 8.33% if they have served more than five years. Contributions must be transferred within 15 days of the start of each calendar month.

Employees can add voluntary contributions, up to 25% of their total wage monthly, or annually if paid as a lump sum. Options include a capital guarantee portfolio, risk-based portfolios and Sharia-compliant funds. The scheme applies to the private sector and free zones.

When an employer enrols you, it stops applying traditional gratuity and must settle any gratuity accrued before enrolment under the law. At the end of employment, you're entitled to the basic subscription amounts plus returns within 14 days, and you can keep the money invested or withdraw it at any time. More guides are at and

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If a rule depends on your age, filing status, or income band, re-check it when any of those facts change. Life events quietly move people across thresholds they last reviewed years earlier. Automation helps. Calendar reminders for annual reviews, automatic transfers, and beneficiary checkups reduce the chance that a good plan dies from neglect.

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