How UAE gratuity is calculated
Under the UAE Labour Law (Federal Decree-Law No. 33 of 2021), end-of-service gratuity for private-sector employees with at least 1 year of continuous service is calculated on basic salary only — not housing, transport or other allowances:
- First 5 years of service: 21 days' basic salary for each year
- Beyond 5 years: 30 days' basic salary for each additional year
- Cap: total gratuity cannot exceed 2 years' total basic salary
- Less than 1 year of service: not eligible for gratuity
Daily wage is calculated as basic monthly salary ÷ 30. A partial final year is paid pro-rata based on the completed months and days.
Worked example
An employee with a basic salary of AED 8,000 who completes exactly 5 years of service: 5 years × 21 days = 105 days' pay. Daily wage = 8,000 ÷ 30 = AED 266.67. Gratuity ≈ 105 × 266.67 = AED 28,000.
⚠️ This calculator gives an estimate for standard onshore UAE private-sector employment under the unified 2022 formula. Free zones with their own labour regulations (e.g. DIFC, ADGM) and pension-scheme employees may follow different rules — always confirm your exact entitlement with your employer, MOHRE, or a labour lawyer before relying on this figure.