How UAE gratuity is calculated
Your daily wage is your last basic monthly salary divided by 30. You earn 21 days of basic salary for each of the first 5 years of service and 30 days for every year after that. Part years are paid pro-rata. The total can never exceed two years of basic salary. Only basic salary counts — housing, transport and other allowances are excluded. You need at least one full year of continuous service, and since the 2021 law, resigning no longer reduces your gratuity.
Worked example
Basic salary AED 6,000, 7 years of service: daily wage = 6,000 ÷ 30 = AED 200. First 5 years: 21 × 5 = 105 days. Next 2 years: 30 × 2 = 60 days. Total 165 days × AED 200 = AED 33,000 — well under the cap of AED 144,000 (2 years of basic salary).
Frequently asked questions
Is UAE gratuity calculated on basic salary or total salary?
Basic salary only. Allowances such as housing and transport are not included under Article 51.
Do I get gratuity if I resign in the UAE?
Yes. Under the 2021 Labour Law, resignation does not reduce your gratuity once you have completed one year of service. The old resignation reductions were removed.
What is the maximum UAE gratuity?
Your total gratuity is capped at two years of your basic salary.
When must UAE gratuity be paid?
Employers must settle all end-of-service dues within 14 days of the contract ending.
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