How gratuity works in the UAE
There is no state pension for expatriate workers in the UAE, so gratuity — also called end-of-service benefits, or EOSB on many payslips — is effectively the whole of your severance entitlement. The same federal formula applies whether you work in Dubai, Abu Dhabi, Sharjah or any other emirate, and in the ordinary free zones; only DIFC and ADGM run their own rules.
It is calculated on your last basic salary, not your package. This single detail is why so many people are shocked by the figure. If your contract says AED 12,000 a month but the basic salary line reads AED 6,000, with the rest split into housing and transport, your gratuity is built on the 6,000. That is lawful, it is written into Article 51, and you should check your MOHRE contract before calculating anything.
The formula
| Period of service | Rate per year | Law |
|---|---|---|
| First 5 years | 21 calendar days of basic salary | FDL 33/2021, Art. 51 |
| Year 6 onward | 30 calendar days of basic salary | FDL 33/2021, Art. 51 |
| Overall ceiling | Two years' wage | FDL 33/2021, Art. 51 |
Your daily rate is the basic monthly salary divided by 30. Part years are paid in proportion once you pass the one-year mark. Below one year of continuous service, nothing is payable. Days of unpaid leave do not count towards service.
Resigning has not reduced gratuity since February 2022
Full explanation of the resignation rule and how to check a settlement built on the old law →
Under the old law, someone who resigned between one and three years received a third of their gratuity, and between three and five years, two thirds. Federal Decree-Law 33/2021 abolished that when it took effect on 2 February 2022. Resignation and termination now produce the same figure.
A lot of pages still publish the old rule, including calculators updated this year. If a site tells you resigning costs you two thirds of your gratuity, it is quoting a law repealed four years ago.
The two-year cap
However long you serve, total gratuity is capped at two years' wage, which you reach at roughly 26 years of service. There is a real ambiguity in how it is applied: most practitioners read "wage" as basic salary, but the wording has been read both ways. This calculator applies the cap on basic salary and tells you when it has bitten, so you can see the uncapped figure and ask.
DIFC and ADGM are different
The federal formula does not apply in the two financial free zones. DIFC replaced gratuity with DEWS, a funded savings plan your employer pays into monthly. ADGM has offered a choice between gratuity and a savings alternative since April 2025.
The voluntary savings scheme
Since Cabinet Resolution 96 of 2023, private-sector employers on the mainland and in the free zones other than DIFC and ADGM may opt into an alternative savings scheme instead of accruing a lump sum: 5.83% of basic salary a month under five years of service, 8.33% above, paid into an approved investment fund. It is still optional for the employer, so most people remain on standard gratuity. MOHRE closed a public consultation on the scheme in February 2026; no decision to make it compulsory had been announced when this page was last verified.
If you were enrolled, you get two things. For service from the enrolment date, your entitlement is the fund balance — contributions plus returns — and gratuity stops accruing. For service before enrolment, the gratuity you had already earned is preserved, calculated on your basic salary at the enrolment date, and is not moved into the fund. This page can calculate that earlier part: enter your enrolment date as your last working day.
Questions people ask
I resigned after two years. Do I lose two thirds of my gratuity?
No. That rule was abolished on 2 February 2022. You receive the full 21 days per year for every completed year, exactly as if you had been terminated.
Is it 21 working days or 21 calendar days?
Calendar days. The daily rate is basic monthly salary divided by 30. Some guides say working days, which produces a much larger figure and is not how MOHRE applies it.
What about unlimited and limited contracts?
That distinction is gone. All contracts are now fixed-term and renewable, and the calculation is the same for everyone. Any calculator still asking you to choose is working from the pre-2022 law.
When must I be paid?
Within 14 days of the contract ending, along with all other final dues. Late payment is a matter for MOHRE.
My employer's figure is lower. What now?
Ask for the calculation in writing, line by line. The usual causes are a resignation penalty that no longer exists, an out-of-date basic salary, over-counted unpaid leave, or service dated from the wrong day.
Is gratuity the same as end-of-service benefits or EOSB?
Yes. Gratuity, end-of-service benefits and EOSB are three names for the same Article 51 payment. Employers, payslips and HR systems use them interchangeably.
Where these rules come from
Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, in force 2 February 2022, Articles 44, 51 and 52, with its amendments · Cabinet Resolution No. 1 of 2022 · Cabinet Resolution No. 96 of 2023 on the voluntary alternative savings scheme, with MOHRE's scheme guidance and its public consultation, closed 28 February 2026 · DIFC Employment Law No. 2 of 2019 · ADGM Employment Regulations 2024.
Where sources genuinely disagree, this page says so rather than picking a number quietly.