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Housing, transport and other fixed allowances.
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Unpaid leave and unexcused absence don't count as service.

How end-of-service is calculated in the UAE

  • You need at least one year of continuous service. Under one year, no gratuity is due.
  • 21 days' basic salary for each of the first five years, then 30 days' basic salary for each year after (Article 51).
  • Uses your last basic salary only. Housing, transport and other allowances are not included.
  • A day's pay is your monthly basic salary divided by 30. Part years count in proportion.
  • The total can't be more than two years' basic salary.
  • Since the 2021 law, resigning no longer reduces your gratuity.
  • Unpaid leave and unauthorised absence days are not counted as service.

Worked example

Basic AED 12,000 (allowances not counted), 8 years, resigned21 days' basic per year (first 5 years): 5 years → AED 42,000.00
30 days' basic per year (after 5 years): 3 years → AED 36,000.00
Gratuity: AED 78,000.00

Good to know

DIFC and ADGM free zones and government jobs use their own rules (DIFC pays into the DEWS savings plan). Employers that joined the optional UAE savings scheme pay monthly contributions instead of a lump sum for those years.

Questions people ask

Is UAE gratuity calculated on basic salary?

Yes. Only the last basic salary counts. Housing, transport and other allowances are excluded.

Do I lose gratuity if I resign in the UAE?

No. Under Federal Decree-Law 33 of 2021, resignation doesn't reduce gratuity. The old one-third and two-thirds cuts no longer apply.

Do I get gratuity if I leave before 1 year?

No. You need at least one full year of continuous service.

When must my employer pay?

Within 14 days of the contract ending.

Compare the GCC

CountryRateSalary usedMinimum serviceIf you resignCap
Saudi Arabia½ month/yr (5 yrs), then 1 monthBasic + allowancesNoneReduced: none <2 yrs, ⅓, ⅔, full at 10None
UAE21 days/yr (5 yrs), then 30 daysBasic only1 yearNo cut24 months
Qatar3 weeks/yr (minimum)Basic only1 yearNo cutNone
Kuwait15 days/yr (5 yrs), then 1 monthBasic + allowancesNoneReduced: none <3 yrs, ½, ⅔, full at 1018 months
Bahrain½ month/yr (3 yrs), then 1 monthBasic onlyNoneNo cutNone
Oman1 month/yr (since Jul 2023)Basic onlyNoneNo cutNone

Official sources