Do I lose gratuity if I resign in the UAE?

Under Federal Decree-Law No. 33 of 2021 there is no reduction for resignation. If you completed at least one year of continuous service, you are entitled to the full 21 or 30 days per year, calculated on your last basic salary.

Is gratuity calculated on basic salary or total salary?

On the last basic salary only. The UAE government portal confirms that allowances such as housing, transport, utilities and furniture are not included.

What if I worked less than one year?

Article 51 requires at least one year of continuous service. Below one year there is no gratuity. After one year, partial years are paid in proportion.

How soon must my employer pay?

Article 53 says the employer must pay wages and all other entitlements within 14 days from the end of the contract.

Does this apply in DIFC, ADGM or to domestic workers?

No. DIFC and ADGM have their own employment laws, and domestic workers are covered by a separate law. UAE nationals receive pension benefits instead of gratuity.

UAE end of service gratuity calculation 2026 explained with examples

End of service gratuity is often the biggest single payment you receive when you leave a job in the UAE. It is also one of the most misunderstood. People mix up basic and total salary, assume resignation cuts the amount, or rely on rules from the old 1980 labour law that no longer apply.

This guide explains the current rules for private sector employees, based on Federal Decree-Law No. 33 of 2021 (the UAE Labour Law) and guidance from the Ministry of Human Resources and Emiratisation (MOHRE). It then walks through five examples with real numbers so you can check your own figure.

This is general information, not legal advice. If your case involves a dispute, contact MOHRE or a qualified lawyer.

Who the rules apply to

Article 51 of the law covers full-time foreign workers in the private sector on the mainland and in most free zones. A few groups are handled differently:

UAE nationals receive end of service benefits through the pension and social security system, not through gratuity.
DIFC and ADGM employees fall under the separate employment laws of those financial free zones.
Domestic workers are covered by a separate domestic workers law.
Part-time and other work patterns are covered by Article 52, which calculates gratuity in proportion to the hours actually worked.

The core formula

According to Article 51, a full-time foreign worker who has completed one year or more of continuous service is entitled to gratuity calculated on the basic wage:

21 days of basic wage for each of the first five years
30 days of basic wage for each year after the fifth

Four further rules shape the final number:

Partial years count. Once you have completed one year, any extra months and days are paid in proportion.
Unpaid absence does not count. Days of unpaid leave are taken out of your service period.
Last basic salary. The calculation uses the last basic wage you were entitled to. Allowances such as housing, transport, utilities and furniture are not included, as the official u.ae portal states.
Two year cap. Total gratuity cannot exceed two years of wage, which means 24 months of basic salary.

The employer may deduct amounts you owe under the law or under a court judgment.

Working out the daily wage

The law states the benefit in days, so you need a daily rate. The common approach, and the one our calculator uses, is:

Daily basic wage = monthly basic salary ÷ 30

Some employers divide the annual basic salary by 365 instead, which gives a slightly lower figure. If your number differs a little from your employer’s, this is usually why. Check your contract and, if unsure, ask MOHRE.

What changed from the old law

Under the old Federal Law No. 8 of 1980, employees who resigned with less than five years of service on certain contracts received only a fraction of their gratuity. That reduction does not exist in Article 51. Today, if you resign after one year or more, you receive the same gratuity as someone whose contract the employer ended, as long as the service was continuous.

The current law also made all contracts fixed term, so the old limited versus unlimited distinction no longer changes the gratuity formula.

Five worked examples

All examples use daily wage = basic ÷ 30.

Example 1: 3 years, basic AED 6,000

Daily wage: 6,000 ÷ 30 = AED 200
Days earned: 3 × 21 = 63 days
Gratuity: 63 × 200 = AED 12,600

Example 2: 3 years and 6 months, basic AED 4,500

Daily wage: 4,500 ÷ 30 = AED 150
Service: 3.5 years, all within the first five
Days earned: 3.5 × 21 = 73.5 days
Gratuity: 73.5 × 150 = AED 11,025

Example 3: 7 years, basic AED 10,000

Daily wage: 10,000 ÷ 30 = AED 333.33
First five years: 5 × 21 = 105 days
Years six and seven: 2 × 30 = 60 days
Total: 165 days × 333.33 = AED 55,000

Example 4: 30 years, basic AED 8,000 (the cap applies)

Daily wage: 8,000 ÷ 30 = AED 266.67
First five years: 105 days. Next 25 years: 25 × 30 = 750 days
Before the cap: 855 days × 266.67 = AED 228,000
Cap: 24 × 8,000 = AED 192,000
Gratuity: AED 192,000

Example 5: 11 months, basic AED 7,000

Less than one year of continuous service, so no gratuity is due. Your other dues, such as unpaid salary and accrued annual leave, are still payable.

Total salary versus basic salary

Offer letters in the UAE often show a large total package made up of basic salary plus allowances. Only the basic part counts for gratuity. For example, a package of AED 15,000 might be AED 7,500 basic plus AED 7,500 in allowances. After four years, the gratuity is 4 × 21 × (7,500 ÷ 30) = AED 21,000, not the AED 42,000 you would get by using the full package.

Before you rely on any estimate, open your contract or your latest payslip and find the exact basic figure.

When and how it is paid

Article 53 requires the employer to pay your wages and all other entitlements, including gratuity, within 14 days from the end of the contract. If payment does not arrive, you can file a complaint with MOHRE through its website, app or call centre. Keep copies of your contract, payslips and your resignation or termination letter.

The voluntary Savings Scheme

Since late 2023, Cabinet Resolution No. 96 of 2023 allows employers to join an optional alternative system, often called the Savings Scheme. The employer pays monthly contributions based on basic salary into approved investment funds instead of paying a lump sum at the end. Gratuity you earned before joining is calculated under the normal rules and paid when employment ends. Contributions and returns from the scheme are paid within 14 days after the job ends. If your employer has enrolled you, your statement from the fund replaces part of the calculation in this guide.

Check your number in under a minute

Open the gratuity calculator, choose UAE, and enter your basic salary, start date and last working day. It applies the 21 and 30 day rules, the one year minimum and the two year cap, and shows your service in years. Everything runs in your browser, so your salary details are never sent anywhere.

Treat the result as an estimate. Unpaid leave, deductions and the exact daily rate in your contract can change the final amount.