How do I calculate my gratuity in the UAE?

Divide your monthly basic salary by 30 to get a daily wage. Multiply it by 21 for each of your first 5 years and by 30 for each year after that. Part years count in proportion, and the total is capped at 2 years' wage (your basic plus allowances), which only matters after more than 25 years with one employer.

How do I calculate gratuity in the UAE for 5 years?

You earn 21 days of basic pay for each of your first 5 years, so 5 years come to 105 days: divide your monthly basic salary by 30 and multiply by 105. On a basic salary of AED 18,500 a month that is AED 64,750. After 4 years it is 84 days, or AED 51,800 on the same basic. Each year after the first 5 adds 30 days.

How do I calculate gratuity in the UAE for 2 years?

You earn 21 days of basic pay for each of your first 5 years (30 days a year after that), so 2 years come to 42 days. Divide your monthly basic salary by 30 and multiply by 42: on a basic salary of AED 18,500 a month that is AED 25,900. The sum is the same whether you resign or are dismissed.

How much gratuity do I get after 1 year?

21 days of basic pay: you earn 21 days for each of your first 5 years and 30 days for each year after that. On a basic salary of AED 18,500 a month that is AED 12,950. You need 1 full year of continuous service first: leave before that and no gratuity is due.

Do I lose my gratuity if I resign?

No. Under the 2021 labour law the same formula applies whether you resign or are dismissed, as long as you've worked at least a year.

Is gratuity worked out on basic salary or the full package?

On basic salary only. Housing, transport and other allowances don't count, so the basic share of your package decides how much gratuity you build up.

When must gratuity be paid?

Within 14 days of the end of your contract, together with your last salary and other dues.

Do DIFC employees get gratuity?

Only for service before February 2020. Since then a DIFC employer pays into a workplace savings plan instead, DEWS or another qualifying scheme: at least 5.83% of your monthly basic salary for your first 5 years of service and 8.33% after that (DIFC Employment Law, Art. 66). Gratuity earned before that date is still owed when you leave, unless your employer moved it into the scheme with your written consent.

What is the UAE's voluntary savings scheme, and does it replace gratuity?

It is an optional alternative to gratuity for private-sector employers, free zones included, set up by Cabinet Resolution 96 of 2023. The choice is your employer's, not yours: it decides whether to join and which groups of staff to enrol, and if you are chosen you are in. From then on, instead of building up gratuity, your employer pays 5.83% of your monthly basic salary into an investment fund for your first 5 years of service and 8.33% after that, and you get the balance within 14 days of leaving. If the job ends before you have worked 1 full year for that employer, it can take its own contributions back. The gratuity you earned before joining isn't lost: it is worked out on your basic salary at the time you joined the scheme and paid when your job ends.

Money and tax

How end-of-service gratuity is worked out in the UAE

The formula, why your basic salary decides it, worked examples for 1, 2, 4, 5 and 10 years, resigning and part years, the savings scheme, DIFC's DEWS and ADGM, with a calculator.

6 min readUpdated 10 October 2026

Short answer

After at least 1 year of service you get 21 days of basic salary for each of your first 5 years, then 30 days for every year after that, capped at 2 years' wage. It's worked out on your basic salary only, not housing or other allowances, and it's due whether you resign or are let go.

Who gets gratuity

Every full-time employee in the private sector who isn't a UAE national earns gratuity once they've worked for the same employer for at least 1 year without a break. Emiratis get end-of-service benefits through the pensions system instead.

If you work part-time, you get the full-time gratuity in proportion to your hours. Temporary work shorter than a year earns none. Free zones with their own employment law work differently: see DIFC and ADGM below.

The formula: days of basic pay for each year

1
Work out your daily basic wage
Your monthly basic salary divided by 30. No article sets a day's pay for people paid by the month, but the law counts a month as 30 days when it works out periods (Art. 67), and MOHRE's own wages guide divides basic salary by the same number (MOHRE's guide (opens in a new window)).
2
The first years
21 days of daily basic wage for each of the first 5 years.
3
Every year after that
30 days of daily basic wage for each further year.
4
Part years and the cap
Part of a year counts in proportion once you've done a full year. Unpaid leave and unpaid absence don't count as service. The total can't be more than 2 years' wage. The law says wage there, not basic wage, and it defines the wage as your basic plus allowances, so the cap is counted on your full monthly pay and only matters after more than 25 years with one employer.

Why your basic salary matters more than your package

A Dubai offer splits the monthly package into basic salary, housing and other allowances. Gratuity is worked out on the basic part alone. For a typical software engineer package of AED 30,500 (≈ ₹7.9 lakh) a month, basic is often around 60%, or AED 18,500 (≈ ₹4.8 lakh). The same package with a smaller basic share pays a smaller gratuity, with no change to your monthly pay.

When you compare offers, ask for the split in writing. Our offer review flags a low basic share, and the salary pages show what each role earns.

Basic salary and allowances What counts as basic, what the law and the DIFC say about the split, and how to ask for a higher basic.

A worked example

With a basic salary of AED 18,500 (≈ ₹4.8 lakh), the daily basic wage is about AED 617. After 5 years your gratuity is about AED 64,750 (≈ ₹16.8 lakh). After 8 years it's about AED 120,250 (≈ ₹31.2 lakh). Worked out on the whole package instead, it would be AED 198,250 (≈ ₹51.4 lakh): that's why the split matters.

Work out your gratuity

Basic salary a month (AED)

Years of service: 8

AED 120,250 ≈ ₹31.2 lakh

About 6.5 months of basic pay. Worked out on basic pay only: housing and transport allowances don't count.

For a free zone, DDA's official calculator (opens in a new window) gives the same figure for the zones it runs, such as Dubai Internet City.

Gratuity after 1, 2, 4, 5 and 10 years: worked examples

The same sum for different lengths of service, on a basic salary of AED 18,500 (≈ ₹4.8 lakh) a month. You earn 21 days of basic pay for each of your first 5 years and 30 days for each year after that, and part of a year counts in proportion. Before 1 full year of service no gratuity is due.

Gratuity by length of service, on the example basic salary
Service	Days of basic pay	Gratuity
1 year	21	AED 12,950≈ ₹3.4 lakh
2 years	42	AED 25,900≈ ₹6.7 lakh
3 years and 6 months	73.5	AED 45,325≈ ₹11.8 lakh
4 years	84	AED 51,800≈ ₹13.4 lakh
5 years	105	AED 64,750≈ ₹16.8 lakh
10 years	255	AED 157,250≈ ₹40.8 lakh

Our gratuity calculator does the same sum for your own basic salary and dates, and adds the leave salary for any leave you haven't taken. It counts the days between your two dates, so for a part year its result can differ a little from a row above.

None of these rows is near the cap: the total can't be more than 2 years' wage, which only matters after more than 25 years with one employer.

Resigning, being dismissed and part years

Under the 2021 law you keep your gratuity when you resign. The old rule that cut it for people who resigned in their first years is gone: the same formula applies whether you leave or are let go. What changes is the notice you must give, covered in our guide to probation and notice.

Your last basic salary is used, not an average.
Part of a final year counts in proportion.
Unpaid leave and unpaid days off are left out of your service.

When it must be paid, and what can be taken off

Your employer must pay your last salary, gratuity and any other dues within 14 days of the end of your contract. It can take off what you owe it, such as an outstanding loan. If an employee dies, the dues go to the family within 10 days. For every line of that last payment, see final settlement in the UAE.

The savings scheme, DIFC and ADGM

Some employers put money into a workplace savings scheme instead of paying gratuity at the end. The employer pays in 5.83% of your basic salary each month for your first five years and 8.33% after that, and you can add up to 25% of your wage yourself. You get the balance within 14 days of leaving. If the job ends before you have worked 1 full year for that employer, it can take its own contributions back.

Companies in DIFC pay into DEWS, DIFC's own savings scheme, at the same minimum rates, instead of gratuity. ADGM in Abu Dhabi keeps gratuity with the same days per year, but its daily rate is the annual basic divided by 365, and basic pay must be at least half of your wages.

If it's DEWS itself you're looking for, DIFC's DEWS page (opens in a new window) has the plan's guide and the link to its administrator's site.

If your employer doesn't pay

Complain to MOHRE first: it tries to settle the claim, and it can decide claims of up to AED 50,000 (≈ ₹13.0 lakh) itself. Bigger claims go to the labour court. Employees pay no court fees on claims up to AED 100,000 (≈ ₹25.9 lakh). Claim within 2 years of leaving, or the right lapses.

Sources

Gratuity calculator for the DDA free zones (opens in a new window), Dubai Development Authority, 29 September 2026
Federal Decree-Law No. 33 of 2021 on employment relationships, with its amendments (opens in a new window), MOHRE, 10 October 2026
Guidance on the ADGM Employment Regulations 2024 (opens in a new window), ADGM Employment Affairs Office, 18 February 2025
Cabinet Resolution No. 96 of 2023 concerning the alternative voluntary end-of-service scheme (English text, PDF) (opens in a new window), UAE Legislation portal, 10 October 2026
Dear worker: know your rights (opens in a new window), MOHRE, 10 October 2026
DEWS guide (DIFC Employee Workplace Savings) (opens in a new window), DIFC, 10 October 2026
Employment Law, DIFC Law No. 2 of 2019 (consolidated version No. 5, July 2025) (opens in a new window), DIFC, 10 October 2026
End of service benefits for employees in the private sector (opens in a new window), u.ae, 12 August 2026
Additional working hours, wages and leaves: a guide (opens in a new window), MOHRE, 10 October 2026

This is guidance, not legal or tax advice. Rules change; check the official source and your employer before you act.