How is gratuity calculated in the UAE?
Under Federal Decree-Law No. 33 of 2021, a full-time foreign worker who completes one year of continuous service earns 21 days' basic wage for each of the first five years and 30 days' basic wage for each year after. Part years count in proportion, and the total cannot exceed two years' wage.
The steps
- Take the last basic salary, not the full package.
- Work out a day's wage, commonly basic ÷ 30.
- Count service from joining to the last working day, less unpaid absence.
- Multiply: 21 days a year for years one to five, 30 days a year after.
- Cap the result at two years' wage.
What changes the figure
Unpaid days of absence are not counted as service. Emirati workers receive end-of-service benefits under the pensions legislation instead. The employer may deduct amounts owed under the law or a court judgment. Part-time workers follow the Implementing Regulation, which pro-rates by contracted hours.
Related tools and guides
See the labour law guide, the gratuity calculator, the overtime calculator, the annual leave calculator, the final settlement calculator and the meaning of basic salary.
Worked example
A worker on AED 6,000 basic leaves after exactly 3 years with no unpaid absence. A day's wage is 6,000 ÷ 30 = AED 200. Gratuity is 200 × 21 × 3 = AED 12,600, well below the two-year cap of AED 144,000.
Questions people ask
Is gratuity paid on allowances?
No, only on basic salary.
What if I worked less than a year?
No gratuity is due under one year of continuous service.
Is there a maximum?
Yes, two years' wage.