How UAE end-of-service gratuity is calculated, with worked examples
This guide shows how the end-of-service gratuity of a full-time foreign worker in the UAE private sector is worked out under Federal Decree-Law No. 33 of 2021, and gives worked examples you can repeat on the gratuity calculator. It is about the mainland rule. Staff of free zones such as DIFC and ADGM follow their own rules: see the free zone guide.
The rule in Article 51
Article 51(2) gives a full-time foreign worker who has completed a year or more of continuous service an end-of-service benefit "calculated according to the basic wage". It is a wage of 21 days for each year of the first 5 years, and a wage of 30 days for each year after that. Article 51(3) adds that a part of a year counts in proportion, once the worker has completed one year. Article 51(4) says unpaid days of absence are not counted as service. Article 51(6) caps the whole benefit at 2 years' wage. Article 51(1) sends UAE nationals to the pension legislation instead, so this rule is not theirs.
Step by step
First, take the last basic wage per month. Allowances such as housing and transport are not part of it: the government page on end-of-service benefits says the gratuity is based on the last basic salary. Second, turn it into a day's wage. The Decree-Law speaks of "a wage of 21 days" without giving a divisor, and this site divides the monthly basic wage by 30, so a basic wage of AED 10,000 gives AED 333.33 a day. Third, count the service in days, less unpaid absence, and spread it over the two rates. Fourth, multiply the days of wage by the day's wage. Fifth, compare the result with 2 years of basic wage and take the lower figure.
Worked example: AED 10,000 basic wage and 7 years of service. The first 5 years earn 5 x 21 = 105 days. The 2 years after that earn 2 x 30 = 60 days. That is 165 days of wage, and 165 x AED 333.33 = AED 55,000.00. Seven years is less than the cap, so AED 55,000.00 is the gratuity.
How the amount grows
The same AED 10,000 basic wage at different lengths of service:
| Service | Days of wage | Gratuity | In months of basic wage |
|---|---|---|---|
| 1 year | 21 days | AED 7,000 | 0.7 months |
| 3 years | 63 days | AED 21,000 | 2.1 months |
| 5 years | 105 days | AED 35,000 | 3.5 months |
| 7 years | 165 days | AED 55,000 | 5.5 months |
| 10 years | 255 days | AED 85,000 | 8.5 months |
| 15 years | 405 days | AED 135,000 | 13.5 months |
| 20 years | 555 days | AED 185,000 | 18.5 months |
| 25 years | 705 days | AED 235,000 | 23.5 months |
The amount rises by 0.7 months of basic wage for each of the first 5 years and by 1 month for each year after that, so the step is larger after the fifth year.
Part years
Once one year is complete, the days after it count in proportion. This site works in days of service and a 365-day year, which the Decree-Law does not state, so a result can differ by a day or two from a payroll that counts months. Example: AED 12,000 basic wage and 6 years and 180 days of service (2,370 days). The first 5 years give 105 days, and the 545 days after them give 545 x 30 / 365 = 44.79 days. Together 149.79 days at AED 400.00 is AED 59,917.81.
Under one year of service nothing is due, however many months have been worked. At exactly one year (365 days in this calculator) the gratuity is 21 days of wage, AED 7,000 on AED 10,000 basic wage.
Unpaid absence
Unpaid days are taken out of the service, not out of the pay. A worker on AED 8,000 basic wage who spent 5 years at the employer and had 60 days of unpaid leave has 1,765 days of service, and the gratuity is AED 27,079.45 instead of AED 28,000.00. Article 33(2) says approved unpaid leave is not counted in the service term.
The two-year cap
The cap is 2 years of basic wage, 24 months, which is 720 days of wage. The first 5 years give 105 days and each later year 30, so the cap is reached after 25.5 years of service. On AED 10,000 basic wage the cap is AED 240,000: 25 years of service gives AED 235,000, and 30 years also gives AED 240,000.
Paying out
Article 53 requires the employer to pay wages and all other entitlements within 14 days of the end of the contract. Article 51(7) lets the employer deduct from the gratuity amounts the worker owes under the law or a court judgment. The calculator shows the gross figure and models no deduction.
What is not covered
The Executive Regulation (Cabinet Resolution No. 1 of 2022) could not be opened in this check, so conditions it may add are not applied. UAE and GCC nationals, part-time and other work patterns (Article 52) and free zone staff need their own rules. The list of unconfirmed items is on Sources and rates.
Calculate your own gratuitySources
- UAE Government portal: Federal Decree-Law No. 33 of 2021 (English text, Articles 33, 51, 52, 53)
- UAE Government portal: End of service benefits for workers in the private sector
- Every rule used, with its source and check date: Sources and rates
This calculator is general information only. It follows Federal Decree-Law No. 33 of 2021 as listed on the Sources page, and your contract, payroll and personal situation may differ. Rules as at 2 November 2026.