What end-of-service gratuity is
Your end-of-service gratuity is a lump-sum payment your employer owes you when your job ends, and it is a legal right under Federal Decree-Law No. 33 of 2021 (Article 51), the UAE Labour Law that took effect on 2 February 2022. It is not a bonus and not optional — the employer must pay it within 14 days of your last working day.
You qualify for gratuity only after completing at least one continuous year of service with the same employer. If you leave before your first anniversary, you receive zero gratuity, so timing your departure matters — resigning at 11 months means you walk away with nothing.
Gratuity applies to full-time private-sector employees across the UAE mainland, whether you resign or are dismissed. Emirati nationals are covered by a separate pension scheme (GPSSA) instead of gratuity, and free-zone bodies like the DIFC and ADGM run their own rules, which we cover in the FAQ below.
How gratuity is calculated: the 21-day and 30-day tiers
Your gratuity is based on your last basic salary only — not your total package — using a two-tier formula set in Article 51. For your first five years of service, you earn 21 calendar days of basic pay for each year worked. For every year beyond five years, you earn 30 calendar days of basic pay per year.
To turn a monthly basic salary into a daily wage, divide it by 30. So a daily wage on a basic salary of AED 12,000 is AED 400. That daily wage is then multiplied by 21 or 30 days per year, and pro-rated for partial years down to the exact day worked.
There is one hard ceiling: your total gratuity can never exceed the equivalent of two years' total salary, no matter how long you served. For a 40-year employee this cap can bite, but for most workers of 5 to 15 years it rarely applies. Use the Calcureal Gratuity Calculator to see your exact figure in seconds.
| Years of service | Rate per year | Basis |
|---|---|---|
| First 5 years | 21 days basic pay | Last basic salary / 30 * 21 |
| Each year after 5 | 30 days basic pay | Last basic salary / 30 * 30 |
| Partial years | Pro-rated to the day | Same rate, fractional |
| Absolute cap | 2 years total salary | Maximum payout |
Resignation vs termination: the key difference
Under the current law, resignation and termination pay the same full gratuity — this is the single biggest change since 2 February 2022. Whether you quit voluntarily or your employer lets you go, you receive 100% of the 21-day/30-day calculation, provided you completed at least one year.
This ended the old penalty system where employees who resigned lost a chunk of their gratuity. Today, an employee who resigns after 4 years gets exactly the same 84 days of basic pay (4 x 21) as one who is terminated after 4 years.
The only situation where resignation still costs you is if your service began before 2 February 2022 under an old unlimited contract, because the pre-2022 deductions can still apply to that legacy period. We break those numbers down in the next section — check your start date first.
The old law: pre-February 2022 unlimited contracts
If your continuous service started before 2 February 2022 on an unlimited contract, resignation can reduce your gratuity on a sliding scale — a rule preserved for legacy service periods. Termination under the old law always paid full gratuity, so the penalty only ever hit people who chose to resign.
The scale worked in thirds. Resigning with 1 to 3 years of service gave you one-third (1/3) of the calculated gratuity. Resigning with 3 to 5 years gave you two-thirds (2/3). Resigning with 5 or more years gave you the full 100%.
In practice, most contracts have now been converted to the fixed-term contracts required since 2022, so this legacy penalty affects a shrinking number of long-tenured workers. If you are unsure which regime applies, your MOHRE contract record shows your exact contract type and start date.
| Service length | Resignation (old unlimited) | Termination (old) |
|---|---|---|
| 1 to 3 years | 1/3 of gratuity | Full gratuity |
| 3 to 5 years | 2/3 of gratuity | Full gratuity |
| 5+ years | Full gratuity | Full gratuity |
Three worked examples
Example 1 — 3 years, AED 15,000 basic, current law. Your daily wage is 15,000 / 30 = AED 500. You earn 21 days per year for 3 years = 63 days. Gratuity = 63 x 500 = AED 31,500, paid in full whether you resign or are terminated.
Example 2 — 7 years, AED 25,000 basic, current law. Your daily wage is 25,000 / 30 = AED 833.33. First 5 years = 5 x 21 = 105 days; the next 2 years = 2 x 30 = 60 days; total 165 days. Gratuity = 165 x 833.33 = AED 137,500, again paid in full for resignation or termination.
Example 3 — 4 years, AED 20,000 basic, pre-2022 unlimited contract, resignation. Your daily wage is 20,000 / 30 = AED 666.67. Full calculation = 4 x 21 = 84 days = AED 56,000. Because you resigned between 3 and 5 years under the old rule, you receive two-thirds: 56,000 x 2/3 = AED 37,333. Had you been terminated instead, you would receive the full AED 56,000.
Common misconceptions that cost you money
Gratuity is calculated on basic salary only — housing, transport, and other allowances are excluded. If your total package is AED 20,000 but basic is AED 12,000, your gratuity is built on the AED 12,000 figure, so always check the basic line on your contract before you estimate.
Unpaid leave does not count as service. Any period of unpaid leave is deducted from your total service days, which lowers the number of years feeding into the 21-day/30-day formula. A month of unpaid leave in a 4-year tenure trims your gratuity accordingly.
Your employer cannot withhold gratuity to punish you for a short notice period. Notice-period disputes are a separate claim under Article 43 — the employer must pay your gratuity in full within 14 days and pursue any notice compensation through its own MOHRE complaint, not by deducting your end-of-service pay.
How to claim your gratuity
Your employer must pay your full end-of-service benefits, including gratuity, within 14 days of your final working day under Article 53. If payment does not arrive, your first step is a formal complaint to the Ministry of Human Resources and Emiratisation (MOHRE) through its app, website, or 600 590 000 hotline.
MOHRE reviews the complaint free of charge and refers unresolved cases to the Labour Court, which does not charge court fees on claims up to AED 100,000. Keep copies of your contract, offer letter, salary slips, and resignation or termination letter — these documents decide your case.
You must file within one year of your last working day. This one-year limitation period is strict: a claim submitted 13 months after you left will be rejected regardless of how strong it is, so act quickly if your employer stalls.