The UAE rewrote its labour law in 2022, and several rules people still repeat online no longer apply. Here's how gratuity works now for private sector employees on the mainland, with worked examples.
Article 51 of Federal Decree Law No. 33 of 2021 applies to private sector employees on the UAE mainland who have completed at least one year of continuous service. Below one year there is no gratuity at all.
UAE nationals are covered by the GPSSA pension scheme rather than employer gratuity. Employees in the DIFC and ADGM financial free zones are under their own employment laws, so this guide doesn't apply to them. Other free zones generally follow the federal law. Our free zones guide explains the differences.
Gratuity is 21 days of basic wage for each of the first five years of service and 30 days of basic wage for each year after that. Parts of a year are paid in proportion. Like most calculators, we convert the monthly basic to a daily rate by dividing by 30.
The law calculates gratuity on the basic wage, which excludes housing, transport and other allowances. Many UAE packages put a large share of pay into allowances, so the basic can be half or less of total monthly pay. Always check the basic figure on your contract or payslip, because using total pay can roughly double the estimate.
Total gratuity can't exceed two years of wage. With the 21 and 30 day structure, the cap only starts to bite after roughly 25 and a half years of service, so it affects very long serving employees.
Under the old 1980 law, employees who resigned with less than five years of service received a reduced amount, and resigning before one year could mean nothing. That tiered reduction was removed when the new law took effect on 2 February 2022. Today, an employee with at least one year of service receives the same gratuity whether they resign or the employer ends the contract. You'll still see the old reductions quoted on older websites, so check the date of anything you read.
Days of unpaid absence are not counted toward service. Paid annual leave, public holidays and sick leave do count. Our unpaid leave guide covers this in detail, including the protected treatment of maternity and sick leave.
For part time contracts, the executive regulations calculate gratuity in proportion to the hours actually worked, so a part time employee's entitlement is smaller than a full time one on the same basic rate.
Article 53 requires the employer to pay all dues, including gratuity, within 14 days of the end of employment. The employer may deduct amounts the employee owes it, such as an outstanding loan documented in writing. If payment is late or disputed, the first step is a complaint to the Ministry of Human Resources and Emiratisation (MOHRE).
Since 2023, private sector employers can choose to join a voluntary alternative end of service scheme under Cabinet Resolution No. 96 of 2023. Instead of paying a lump sum at the end, the employer makes monthly contributions into an approved investment fund for each employee. If your employer has joined, your entitlement for the period covered depends on the fund balance rather than the Article 51 formula. Ask HR whether this applies to you before relying on a calculator estimate.
Calculate your gratuityChecked against the published labour law text for each country. Where the law is unclear or interpretations differ, we say so. Last verified 30 September 2026.