UAE Gratuity Explained: How End-of-Service Pay Is Calculated
How UAE end-of-service gratuity works: who qualifies, the 21-day and 30-day formula, a worked example, the two-year cap and when your employer must pay.
When a job in the UAE ends, most expatriate workers in the private sector are owed a lump sum called end-of-service gratuity. Many people don’t know how much to expect until the final settlement arrives. Here is how to work it out yourself in a few minutes.
Who gets gratuity
According to the UAE government portal, a full-time expatriate worker who has completed at least one year of continuous service is entitled to gratuity when the job ends. Less than one year means no gratuity.
UAE nationals are covered by the country’s pension and social security system instead.
The formula
- First five years: 21 days of basic salary for each year.
- After five years: 30 days of basic salary for each extra year.
- Cap: the total cannot be more than two years’ wage.
Three details change the result:
- Basic salary only. It is calculated on your last basic salary. Housing, transport and other allowances are not included.
- Part years count. After your first year, extra months are paid in proportion.
- Unpaid leave does not count. Days of unpaid absence are left out of your length of service.
A worked example
Basic salary AED 5,000 a month, seven years of service. A day’s pay is usually taken as the monthly basic salary divided by 30, so about AED 166.67.
| Period | Days | Amount |
|---|---|---|
| First 5 years (21 days × 5) | 105 | AED 17,500 |
| Next 2 years (30 days × 2) | 60 | AED 10,000 |
| Total gratuity | 165 | AED 27,500 |
This is an estimate. Your employer’s final figure can differ slightly because of unpaid leave or deductions.
When you must be paid
Employers must pay all outstanding wages, other entitlements and gratuity within 14 days of the end of the contract. They may deduct amounts you owe them, such as an unpaid loan.
Part-time and other contracts
Part-time workers get a share of the full-time amount, based on their contracted hours compared with a full-time contract. Temporary work of less than one year does not earn gratuity.
The Savings Scheme
Some employers have joined the Savings Scheme, a voluntary alternative launched by the Ministry of Human Resources and Emiratisation (MOHRE). The employer pays monthly into an investment fund, and you receive those contributions plus any returns in place of the usual gratuity. Ask your HR team which system applies to you.
Check your basic salary now
Because gratuity depends on basic salary, a contract with a low basic salary and high allowances gives a smaller payout. Look at the split in your contract before you sign, not on your last day.
If your gratuity is not paid, you can raise a complaint with MOHRE.
Source: the UAE government portal’s page on end-of-service benefits for workers in the private sector (updated 15 October 2026), based on Articles 51–53 of Federal Decree-Law No. 33 of 2021. Rules can change, and this guide is general information, not legal advice. Always confirm with the official source.
Applying for your next role? Read How to Write a CV for UAE Jobs.
