How it works
The rule
End of service gratuity in the UAE is set by Article 51 of Federal Decree-Law No. 33 of 2021. A full-time employee who completes one year of continuous service is entitled to:
- 21 days of basic wage for each of the first five years
- 30 days of basic wage for each year after the fifth
A day of wage is the monthly basic divided by 30. Parts of a year count in proportion, and the whole gratuity is capped at two years of basic wage.
Basic wage only
The calculation uses the last basic wage you were entitled to, not the total package. Housing, transport, school and other allowances are excluded. If your contract puts most of your pay into allowances, your gratuity is correspondingly smaller.
Resignation and termination are treated alike
The 2021 law dropped the reductions the old law applied to employees who resigned. Whether you resign or are terminated, the same formula applies once you have passed one year of service. The employer may still deduct amounts you lawfully owe.
Unpaid leave
Days of absence without pay are not service. Hasiby subtracts them before working out the years, which can push someone near the one-year mark below the threshold.
A worked example
Basic wage 10,000 dirhams, seven years of service:
- daily wage: 10,000 ÷ 30 = 333.33
- first five years: 5 × 21 × 333.33 = 35,000
- two more years: 2 × 30 × 333.33 = 20,000
- gratuity: 55,000 dirhams
After thirty years the formula would give 285,000, but the cap of 24 × 10,000 limits it to 240,000.
Checking the result
The Ministry of Human Resources and Emiratisation offers an official calculator, and the UAE Government portal explains the rule. Hasiby shows each step so you can compare. Employees in a free zone should also check their zone's regulations, and UAE nationals are covered by the pension system rather than this gratuity.
Frequently asked questions
Is gratuity calculated on my full salary?
No. Article 51 uses the last basic wage only. Housing, transport and other allowances are left out, which is why the basic figure in your contract matters so much.
Do I lose part of my gratuity if I resign?
Not under the current law. Federal Decree-Law 33 of 2021 removed the old resignation reductions; a resigning employee with at least one year of service receives the same gratuity as one who was terminated.
I have been here eleven months. Do I get anything?
No. Gratuity starts after one year of continuous service. Once you pass the year, every month counts in proportion.
What is the two-year cap?
However long you have worked, the total gratuity cannot exceed two years of your basic wage, so 24 times the monthly basic.
Does unpaid leave reduce my gratuity?
Yes. Days of absence without pay are not counted as service, so they are taken out before the years are worked out.