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End-of-Service Gratuity in the UAE: How to Calculate It Step by Step (With Examples)

zTraining Club Team··6 min read
The short answer: a non-national worker who completes one year or more of continuous service is entitled to a gratuity calculated on the last basic wage: 21 days' wage for each of the first five years, and 30 days' wage for each year after that, capped at two years' wage. There is no gratuity before completing one year.

The key rules

  • Eligibility: at least one year of continuous service.
  • Basis: the last basic wage, not the total with allowances.
  • First 5 years: 21 days per year.
  • After 5 years: 30 days per additional year.
  • Cap: the total gratuity may not exceed two years' wage.
  • Unpaid leave: unpaid days of absence are not counted in the service period.
  • Payment deadline: the employer must pay the worker's wages and entitlements within 14 days of the contract ending.

UAE nationals working in the private sector are covered by pension and social security legislation instead, according to the Official Portal of Dubai.

How to calculate it in days

The easiest way is to work out the number of days of basic wage you are owed first:

Example 1: 3 years of service → 3 × 21 = 63 days of basic wage.
Example 2: 7 years of service → (5 × 21) + (2 × 30) = 105 + 60 = 165 days of basic wage.

Then multiply the days by your daily basic wage. Purely as an illustration: with a basic salary of AED 4,000 and a daily wage based on a 30-day month (AED 133.33), 63 days comes to about AED 8,400. How the daily wage is calculated, and any details specific to your case, are set by the implementing regulation, so check it or ask the ministry before relying on a figure.

Why your basic salary matters from day one

Because the gratuity is calculated on it alone. Two offers with the same total pay can lead to very different gratuities if one has a higher basic salary. So review the salary breakdown before signing; see the employment contract checklist.

Practical steps when your service ends

  1. Work out your continuous service accurately, excluding unpaid days of absence.
  2. Calculate your gratuity days with the formula above.
  3. Add pay for any unused annual leave. See the annual leave guide.
  4. Follow up on receiving your dues within 14 days of the contract ending.
  5. In case of a dispute, contact the Ministry of Human Resources and Emiratisation (600590000).

Official sources

This article is general guidance, not legal advice. Rules can change, so always check the official sources or contact the Ministry of Human Resources and Emiratisation (600590000) about your specific case.

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FAQ

How is end-of-service gratuity calculated in the UAE?

21 days of the last basic wage for each of the first five years and 30 days for each year after, capped at two years' wage, for workers with at least one year of continuous service.

Am I entitled to gratuity if I worked less than a year?

No. The law requires at least one year of continuous service.

Is gratuity calculated on the total salary?

No. It is calculated on the last basic wage only, without allowances.

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