The rule in one line
Under Article 51 of the UAE Labour Law (Federal Decree-Law No. 33 of 2021), a foreign full-time employee who completes at least one year of continuous service gets 21 days of basic salary for each of the first five years, and 30 days of basic salary for each year after that. Part of a year counts in proportion. The total can never be more than two years of salary.
- 1Find your basic salary (without allowances)
- 2Daily wage = basic ÷ 30
- 321 days a year for years 1-5
- 430 days a year after year 5
- 5Check the 2-year limit
What "basic salary" means
Gratuity is worked out on your last basic salary only. Housing, transport, phone and other allowances are not included. If your total salary is AED 8,000 but the contract shows a basic of AED 5,000, the gratuity is calculated on AED 5,000.
Look at your employment contract or your salary slip: the basic salary is usually written separately from the allowances.
Example: basic salary AED 5,000
The daily wage is 5,000 ÷ 30 = AED 166.67. This is how the gratuity grows with the years of service:
| Years of service | Days of wage | Gratuity (AED) |
|---|---|---|
| Under 1 year | 0 | 0 |
| 1 year | 21 | 3,500 |
| 3 years | 63 | 10,500 |
| 5 years | 105 | 17,500 |
| 6 years | 135 | 22,500 |
| 8 years | 195 | 32,500 |
| 10 years | 255 | 42,500 |
Notice the jump after year 5: each year from then on adds 30 days instead of 21 - that is 43% more per year.
Do you lose gratuity if you resign?
No - not under the current law. Before February 2022, an employee who resigned within 5 years received only one third or two thirds. The 2021 law removed these reductions: resigning and being terminated give the same gratuity.
The gratuity is not paid when there is less than one year of service.
What reduces the period of service
Days of unpaid absence are not counted. If you took 30 days of unpaid leave during 4 years, your service is counted as 4 years minus 30 days.
The two-year limit
The total gratuity cannot be more than two years of wage. On a basic of AED 5,000 that limit is AED 120,000 - you would only reach it after a very long service (about 25 and a half years).
When must it be paid?
The employer must pay all end-of-service dues, including gratuity, within 14 days after the contract ends. If it is not paid, you can complain to the Ministry of Human Resources and Emiratisation (MOHRE).
Sources
- Federal Decree-Law No. 33 of 2021, Article 51, as explained by Gulf News and Morgan Lewis.
- This guide is general information, checked in October 2026. Your employer, MOHRE or a court gives the final figure.