UAE Gratuity Calculator — End of Service Benefits

📅 What's New in 2026

Savings scheme expansion: The DIFC DEWS scheme continues to expand. Employees in DIFC are not entitled to traditional MOHRE gratuity — they are enrolled in DEWS instead.

Unlimited contracts phased out: All employment contracts since February 2022 are limited (fixed-term). The old sliding-scale reduction that once applied to resignation from unlimited contracts has been repealed, so resignation no longer reduces gratuity.

How is UAE gratuity calculated?

Gratuity is calculated on basic salary at 21 days per year for the first 5 years of service, then 30 days per year for each year beyond 5 years. Partial years are prorated. The total is capped at 2 years of basic salary. Example: 7 years at AED 10,000/month basic = (21 × 5 × 10,000/30) + (30 × 2 × 10,000/30) = AED 35,000 + AED 20,000 = AED 55,000.

What is the gratuity cap in UAE?

Total end-of-service gratuity cannot exceed 2 years (24 months) of basic salary, regardless of total years worked. This cap is set in Article 51 of Federal Decree-Law No. 33 of 2021. Once the combined gratuity from all periods reaches 24 months of basic salary, it stops accruing — extra years of service do not increase the payout beyond this ceiling.

Do free zone employees get gratuity?

Most free zone employees — DMCC, JAFZA, IFZA, RAKEZ, SHAMS, etc. — are covered by standard MOHRE gratuity rules and are entitled to end-of-service gratuity. DIFC employees are not covered by MOHRE; they participate in the DEWS scheme instead. ADGM employees follow ADGM Employment Regulations which operate a separate savings mechanism.

Is gratuity calculated on basic salary or total salary?

Gratuity is calculated on basic salary only, under Article 51 of FDL No. 33/2021. Housing allowance, transport, commission, bonuses, mobile allowance, and all other components are excluded. If your employment contract does not specify a basic salary separately, the court may consider the total package, which is why most contracts in the UAE explicitly break out the basic component.

What happens to gratuity if I resign vs get terminated?

Under the current UAE Labour Law, the gratuity entitlement is identical whether you resign or are terminated. The old sliding-scale reduction (one-third for 1–3 years, two-thirds for 3–5 years) was repealed with the previous labour law and no longer applies. Termination for serious misconduct under Article 120 — including theft, assault, or fraud — results in zero gratuity.

UAE Gratuity Rules Explained

• •Eligibility: Minimum 1 year of continuous service (Art. 51, FDL 33/2021).
• •First 5 years: 21 days of basic salary per year.
• •Beyond 5 years: 30 days of basic salary per year.
• •Cap: Total gratuity cannot exceed 2 years of basic salary (Art. 51).
• •Basic salary only: Housing, transport, and other allowances are excluded.
• •Payment deadline: Employers must settle gratuity within 14 days of contract end (Art. 53).
• •Misconduct dismissal: Zero gratuity under Article 120 (theft, fraud, assault, serious breach).