MONEYUAE Gratuity Explained: How Your End-of-Service Pay Is Calculated (2026)
Updated September 2026 · 6 min read
In this guide:
1. Short answer · 2. Who qualifies for gratuity · 3. The formula · 4. Worked example · 5. What doesn’t count · 6. When and how it’s paid
1. Short answer
UAE gratuity = 21 days of basic salary per year for your first 5 years, then 30 days per year after that — capped at 2 years of salary in total. It is paid when your employment ends, whether you resign or are terminated, as long as you completed at least 1 year of continuous service.
2. Who qualifies
- Full-time employees under UAE Labour Law with 1+ year of continuous service.
- Both resignation and termination qualify — the formula is the same.
- Employees with less than 1 year get nothing.
- Free-zone employees: mostly the same rules, but check your zone's regulations.
3. The formula
| Service | Gratuity per year |
|---|
| Years 1–5 | 21 days of basic pay |
| Year 6 onwards | 30 days of basic pay |
| Maximum | 2 years of basic salary (total cap) |
Daily wage = basic salary ÷ 30. So one "21-day" year = 21 ÷ 30 = 0.7 months of basic pay; a "30-day" year = exactly 1 month of basic pay.
4. Worked example
Say your basic salary is AED 8,000 and you worked 7 years:
- First 5 years: 5 × 21 days = 105 days × (8,000 ÷ 30) = AED 28,000
- Next 2 years: 2 × 30 days = 60 days × (8,000 ÷ 30) = AED 16,000
- Total gratuity: AED 44,000
Skip the math — use our UAE gratuity calculator for your exact numbers.
5. What doesn’t count
- Allowances don't count: only basic salary — housing, transport and other allowances are excluded.
- Unpaid leave breaks continuous service calculations.
- Any amounts you owe the employer (loans, advances) can be deducted.
6. When and how it’s paid
Gratuity is due when your employment ends and should be paid with your final settlement — typically within days of your last working day, after visa cancellation. If your employer delays or disputes it, you can file a complaint with MOHRE.
Verdict: gratuity is simple once you know the 21/30-day rule and that only basic salary counts. Run your numbers in the
gratuity calculator before you sign anything — many people discover their "final settlement" figure was wrong.
FAQs
Do I get gratuity if I resign?
Yes — resignation and termination use the same formula, as long as you completed at least one year of continuous service.
Is gratuity calculated on basic salary or total salary?
Basic salary only. Allowances like housing and transport are excluded.
What is the maximum gratuity in the UAE?
Two years of basic salary — the total can never exceed that cap.
