Is end-of-service gratuity capped in the UAE?
Yes. Article 51 of Federal Decree-Law No. 33 of 2021 says a foreign worker's end-of-service benefit in total may not exceed two years' wage. With 21 days a year for the first five years and 30 days after that, the cap is reached only after long service.
When the cap bites
Two years' wage is about 730 days of basic wage. Five years at 21 days gives 105 days, and each further year adds 30 days, so the cap is reached after a little more than 25 years of continuous service. Most construction workers never reach it, but long-serving staff do.
What else can reduce gratuity
Unpaid days of absence are excluded from service. The employer may deduct amounts owed under the law or a court judgment, following the Implementing Regulation. Gratuity uses the last basic wage, not the total package.
How SupaJack Construct applies it
The final settlement calculates gratuity on basic wage and caps it at 24 months of basic salary, then posts it with the leave and notice amounts in one balanced journal entry.
Related tools and guides
See the UAE labour law guide for contractors, the final settlement calculator, the gratuity calculator, the annual leave calculator, the unpaid leave deduction calculator, payroll and WPS in SupaJack Construct, time and attendance and the meaning of basic salary.
Worked example
A site manager with a basic wage of AED 10,000 leaves after 28 years. Uncapped gratuity would be 105 days for the first five years plus 690 days for the next 23, 795 days of basic wage. The cap limits the payment to two years' wage, AED 240,000.
Questions people ask
Does the cap apply to UAE nationals?
Nationals receive end-of-service benefits under the pensions legislation instead.
Is the cap based on basic wage?
Gratuity is calculated on basic wage, and the cap is two years of it.
Can a contract give more?
Yes. The law sets the employee's minimum, not a limit on what employers can give voluntarily.