How to Calculate Your UAE Gratuity

If you’re resigning or being let go, your end-of-service gratuity isn’t negotiable — it’s set by federal law. Since 2022, the rules changed in employees’ favour, but most people are still calculating it using the old, less generous formula.

The current rule (since February 2022)

Under Federal Decree-Law No. 33 of 2021, gratuity is calculated on your basic salary only (housing, transport, and other allowances are excluded):

• 21 days’ basic salary per year for each of your first 5 years of service.
• 30 days’ basic salary per year for every year beyond 5.
• Total gratuity is generally capped at 2 years’ total salary.

The big change: resignation no longer reduces it

Before 2022, resigning before completing 5 years cut your gratuity on a sliding scale (sometimes to nothing before year 1). That rule was abolished. Whether you resign or are terminated, you’re entitled to the full calculation above for every completed year of service.

How to calculate it yourself

1. Take your basic monthly salary and divide by 30 to get your daily rate.
2. For your first 5 years: daily rate × 21 × years of service.
3. For any years beyond 5: daily rate × 30 × those additional years.
4. Add both figures together.

Worked example: basic salary AED 12,000/month, 6.5 years of service.

• Daily rate: AED 400
• First 5 years: 400 × 21 × 5 = AED 42,000
• Remaining 1.5 years: 400 × 30 × 1.5 = AED 18,000
• Total gratuity: AED 60,000

Common mistakes to avoid

• Calculating on total salary instead of basic salary — this overstates the figure significantly if allowances make up a large share of your pay.
• Assuming resignation reduces your entitlement — it no longer does, for completed years of service under the new law.
• Forgetting the 2-year total salary cap on very long tenures.

If your employer disputes the calculation or delays payment, you can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE).

Last verified July 2026, based on Federal Decree-Law No. 33 of 2021 (effective February 2, 2022). Estimates only — confirm your specific entitlement with MOHRE or a labour lawyer, especially for unlimited contracts predating the law or DIFC/ADGM employment (separate rules apply). An interactive calculator version is coming soon.

Related Guides

• Jobs & Careers — notice periods, probation rules, and what happens if you resign without serving notice
• Money Saving Guide — the 50/30/20 budgeting rule for making the most of your salary
• Banking — choosing a bank and avoiding account issues while employed