How UAE gratuity is calculated
End-of-service gratuity is set by Federal Decree-Law No. 33 of 2021, in force since 2 February 2022. A full-time private-sector employee who completes at least one year of continuous service is entitled to it, calculated on the basic salary — allowances are excluded.
- 21 days' basic pay for each of the first five years of service.
- 30 days' basic pay for each year beyond five.
- The total is capped at two years' pay.
The daily wage is the basic monthly salary divided by 30. So on a basic of AED 10,000 with four years of service: AED 10,000 ÷ 30 = AED 333.33 a day, × 21 days × 4 years = AED 28,000.
Resigning vs being terminated
Under the 2021 law the old reductions for resignation on unlimited contracts were removed. An employee who resigns after completing a year receives their full gratuity, the same as one whose contract is ended by the employer. Gratuity is only forfeited where an employee is dismissed for gross misconduct under Article 44 — the advanced option accounts for this.
When you need more than the number
The arithmetic is the easy part. Whether unpaid leave reduces your service, how a mid-contract salary change is treated, and what a full and final settlement should include are where disputes start. If you are an employer running payroll, or a business owner planning your team's end-of-service liability, our PRO and payroll team handles it correctly. For the full picture on your own departure, try the end-of-service settlement calculator.
This calculator applies the standard MOHRE formula for full-time private-sector employees as at July 2026. Your exact entitlement depends on your contract, any unpaid periods and the reason for leaving — treat the result as a figure to confirm, not legal advice.