UAE End-of-Service Gratuity Calculator

End-of-service gratuity is a lump-sum payment a private-sector employee is legally owed when their employment ends — by resignation, termination, or contract expiry — once they have completed at least one full year of continuous service. Under Article 51 of Federal Decree-Law No. 33 of 2021, it is calculated on the employee’s last basic salary only, not the full monthly wage.

This is a common point of confusion. Housing, transport, and every other allowance sit outside the calculation — only the basic wage counts, and the daily rate is that basic figure divided by 30. Getting this wrong, often by treating gross salary as the base, is one of the most frequent sources of final-settlement disputes referred to MOHRE.

The formula is built on two tiers. For each of the first five years of service, the employee earns 21 days of basic wage. From the sixth year onward, each additional year earns 30 days. Whatever the length of service, the total gratuity can never exceed the equivalent of two years’ basic wage.

Since February 2022, the law no longer distinguishes between limited and unlimited contracts — all private-sector contracts are now fixed-term, and the same formula applies whether an employee resigns or is terminated. Employers must settle gratuity and all other end-of-service entitlements within 14 days of the contract ending.