UAE End-of-Service Gratuity Calculator

What the end-of-service gratuity is — and who it covers

The end-of-service gratuity — widely called simply "the gratuity" — is the lump sum a foreign private-sector employee working full-time earns when the employment relationship ends, in return for the years of service given. Its basis is Article 51 of Federal Decree-Law No. 33 of 2021, in force since 2 February 2022, and it applies on the mainland and in free zones that follow the federal law (JAFZA, Dubai Media City, DMCC and similar). UAE and GCC nationals are not in this system at all: their retirement rights sit with the pension law (the General Pension and Social Security Authority, GPSSA). Also outside this page: government and military employees, domestic workers (who have their own law, Decree-Law 9/2022), and employees in the DIFC and ADGM — who have their own sections below. The first condition of entitlement is at least one full continuous year with the same employer; leave before that, for any reason, and nothing is due.

Employees in other work patterns, such as part-time, are not denied a benefit — theirs is calculated pro-rata to actual working hours against full-time hours under Article 30 of the Implementing Regulation (Cabinet Resolution 1/2022). This calculator is built for full-time employment, by far the most common pattern; if your contract is part-time, treat its output as an approximate ceiling and ask HR for a settlement based on your actual hours ratio.

The formula, step by step — with a fully worked example

The formula has four ingredients: a daily wage from your last basic salary, wage-days per year at two rates, your service period net of unpaid absence, and a cap. The two rates come from Article 51(2): 21 days of basic pay for each of the first five years, and 30 days for each year beyond, with part-years counting pro-rata. Because the law never names the daily-wage divisor, the dominant practice — and this calculator's headline method — divides the monthly basic by 30, matching the law's own convention for periods (a month is 30 days, a year 365).

A complete example: your last basic salary is AED 12,000 and your service is 7 years and 6 months, with no unpaid absence. Step one: daily wage = 12,000 ÷ 30 = AED 400. Step two: band 1 — 5 years × 21 days = 105 wage-days. Step three: band 2 — 2.5 years × 30 days = 75 wage-days. Step four: total 180 wage-days × 400 = AED 72,000. No cap applies, because the figure is far below two years of your basic salary (AED 288,000). Run the same numbers through the calculator above and you will see exactly this, line by line. If instead your employer works out the daily wage from the annual basic (12,000 × 12 ÷ 365 = AED 394.52), the result is AED 71,013.70 — a difference of about 1.4%, explained in the FAQ and always shown by the calculator as a second line so it never surprises you on a settlement statement.

Basic, not total — and the truth about the "60% rule"

This is the point on which thousands of dirhams of error are made in both directions: the gratuity is calculated on your last basic salary alone. Article 51(5) takes the last basic wage as the basis and excludes from the wage such items as housing allowance, transport allowance, utilities and furniture expenses "and the like". If your basic was raised during your service — from 8,000 to 10,000, say — all your years are calculated on the final 10,000, not averaged and not year-by-year. Entering your total salary (basic plus allowances) into a calculator can double your expected figure; being settled on an old basic from before your last raise quietly underpays you.

Attached to this is the "60% rule" myth: many people believe the law requires the basic salary to be 60% of the total. There is no such text in the UAE Labour Law — not 60%, and not any other percentage, on the mainland. Splits of 60/40, 50/50 and 70/30 are contractual arrangements and market customs that vary from employer to employer and offer to offer. That is why this calculator assumes no split: it asks for your basic as written in your contract, and its helper fills the field with whichever split you choose, with an explicit warning that it is custom, not law. The only binding ratios in the country are elsewhere: the DIFC and ADGM both require the basic to be at least 50% of total pay for entitlement purposes. If you find your basic artificially compressed against your total, you can raise it with MOHRE — the written contract and official wage records are the reference, not anything agreed verbally.

Resignation and termination today: no fractions, no deductions

This is the most important section on the page, because most of the internet's Arabic and English content on the subject still teaches a dead rule. The old Labour Law (No. 8 of 1980) cut a resigning employee's gratuity by two-thirds for service of one to three years and by one-third for three to five years — under indefinite-term contracts. That law was repealed in its entirety and replaced by the 2021 law, which wrote Article 51 as a single formula that does not change with who ended the contract — and indefinite contracts themselves no longer exist, all contracts having become fixed-term. The real table today is almost disappointingly simple:

A second misconception travels with this one: that leaving without serving your notice period burns the gratuity. It does not — notice and gratuity are separate rights. An employee who leaves without notice (outside the lawful grounds in Article 45, such as unpaid wages or assault) may face a compensation claim from the employer for the notice period under Article 43, but that is an independent claim set against the entitlement, not a deduction from it and certainly not a cancellation of it. A final caution for long-serving staff: if your contract was an indefinite one concluded under the 1980 law and was never converted, a transitional rule (Article 68(3)) may be argued to allow calculation under the old system — a narrow and shrinking point; if you suspect it applies to you, check with MOHRE before accepting any settlement.

Dismissal for cause (Article 44): what do you actually lose?

Article 44 allows an employer to dismiss an employee without notice on ten exhaustively listed grounds — such as obtaining the job with forged documents, an error causing gross material loss (on its conditions), disclosing the establishment's secrets, assaulting the employer or colleagues, and absence without lawful cause beyond the stated limits — after a written investigation communicated to the employee. Many assume dismissal on these grounds means losing everything. The truth: an Article 44 dismissal forfeits notice pay, because the termination is immediate and lawful, and it does not touch the gratuity: Article 39(1) lists the graduated disciplinary penalties and makes the maximum "dismissal from service while preserving the employee's right to the end-of-service gratuity". Confiscating the gratuity for a disciplinary dismissal was a rule of the repealed law, and it died with it. The only lawful deductions from your settlement are sums fixed by law or a court judgment (such as a documented, unpaid salary advance) — any other "penalty" deduction is unlawful.

The counterpart of Article 44 is Article 47: if your employer terminated you because you filed a genuine complaint with the authorities or a claim that proved valid, the termination is "unlawful" and you are entitled — on top of your full gratuity — to compensation assessed by the court of up to three months' pay. Articles 44 and 47 are not two sides of one coin: the first lists grounds for lawful immediate dismissal; the second protects you against retaliatory dismissal.

The DIFC and ADGM: two different worlds

The Dubai International Financial Centre (DIFC) is a financial free zone with its own employment law (Law No. 2 of 2019), and the federal Labour Law does not run inside it. Since 1 February 2020 the lump-sum gratuity has been replaced by monthly contributions into the DEWS workplace savings scheme: the employer pays 5.83% of your monthly basic salary for each of the first five years and 8.33% thereafter — the rates that are mathematically equivalent to the 21/30-day accrual, but paid month by month into a fund in your name and invested. On a basic salary of AED 10,000 that is AED 583 a month in the first phase and AED 833 after it; your balance when you leave is total contributions plus investment returns, starting from your first month with no qualifying period, and it cannot be forfeited on resignation or dismissal. Anything that accrued to you before February 2020 stays ring-fenced under the old gratuity, separately.

Abu Dhabi Global Market (ADGM), by contrast, kept the lump-sum gratuity in its 2024 Regulations (21/30 days) but with the four differences documented in the calculator's explainer: no two-year cap, a 50% basic floor, a ÷ 365 daily wage, and entitlement even on a dismissal for cause, with a written opt-in savings scheme able to replace the gratuity. And if you work in Saudi Arabia rather than the Emirates, your tool is the Saudi end-of-service calculator — its law (Labour Law Articles 84–87) is entirely different, and resignation fractions genuinely still apply there.

The two-year cap, and unpaid absence

The ceiling on the gratuity is in Article 51(6): "in all cases, the total gratuity shall not exceed two years' wage". Those two years are read in dominant practice as 24 × your monthly basic salary — the reading this calculator uses — although a minority reading takes two years of total salary, which would give a higher ceiling; we mention it because honesty requires it, and we prefer the basic-salary reading because it is the dominant and more conservative one, so the tool never promises you money that may not arrive. In practice the cap only bites after roughly 25.5 years of service on a constant basic salary: in our worked example, 30 years on a basic of AED 12,000 produces AED 342,000 calculated, cut back to the AED 288,000 cap.

Unpaid absence is governed by Article 51 itself: its days do not count in the service period the gratuity is built on. A month of unpaid leave in the middle of your service does not merely "pause the clock" — its days are removed from your counted service before the split between the two bands. That is why the calculator has a dedicated field for days of unpaid absence: enter the total across all your years (from attendance records or payslips) and it is deducted automatically. The more accurate that number, the more accurate your result — especially near the band boundary and the first qualifying year.

Getting paid: the 14-day rule and what comes after

Article 53 obliges the employer to pay wages and all entitlements — the gratuity first among them — within 14 days of the date the contract ends (21 days in ADGM). At settlement, ask for an itemised statement, not a single figure: the basic salary used, the start and end dates, any excluded unpaid days, the wage-days in each band, and every deduction with its basis — any deduction not resting on a sum fixed by law or a court judgment can be challenged. If your employer's figure differs from yours, ask first which daily-wage divisor they used (÷ 30 or ÷ 365) before anything else; most small, honestly explainable differences live there.

If an amicable settlement fails, MOHRE's channels (app, website and service centres) are the first step for a labour complaint, and the official wage records in the Wage Protection System are a primary reference for proving your basic salary and service. One practical closing note: if you are offered enrolment in the voluntary alternative Savings Scheme (Cabinet Resolution 96/2023), know that enrolling stops your gratuity accruing under the old rules from that date and replaces it with monthly contributions (a minimum employer contribution of 5.83%/8.33% of basic) invested for your account — a decision worth taking with understanding, not with a quick signature. And in the event of an employee's death, their entitlements — including the gratuity where a year of service was completed — are paid to their family and heirs in accordance with the law; the family can confirm the payment process and required documents with the Ministry.