The UAE Ministry of Human Resources and Emiratisation (MOHRE) has clarified how private-sector employees can calculate their end-of-service gratuity. The guidance covers eligibility, payment rates and the deadline for employers to settle final dues.
- UAE gratuity rules: Who qualifies for end-of-service pay?
- How to calculate UAE end-of-service gratuity
- UAE gratuity calculator: Examples by salary and service
- UAE employers must settle final dues within 14 days
- UAE gratuity cap and alternative Savings Scheme
- What UAE employees should check before leaving a job
In a social media post on 22 October, the ministry highlighted existing provisions of the UAE Labour Law. It did not announce any changes to gratuity entitlements.
Under the standard system, eligible foreign full-time employees qualify for gratuity after completing at least one year of continuous service. Their entitlement depends on their last basic salary and length of service.
Employers must also settle outstanding wages and other end-of-service entitlements within 14 days of the employment contract ending.
UAE gratuity rules: Who qualifies for end-of-service pay?
Article 51 of Federal Decree-Law No. 33 of 2021 sets out the standard end-of-service benefit rules for eligible foreign employees in the private sector.
Employees must complete at least one year of continuous service to qualify. Those who leave before completing one year do not receive gratuity under the standard system.
However, employees who complete at least one year can receive a proportionate amount for an additional part of a year. The calculation excludes periods of unpaid absence.
Gratuity is based on the employee’s last basic salary. Housing allowances, transport allowances and other benefits do not form part of this calculation.
How to calculate UAE end-of-service gratuity
The standard calculation uses two rates, depending on the employee’s length of service.
- First five years: 21 days of basic salary for each year.
- After five years: 30 days of basic salary for each additional year.
- Partial years: A proportionate amount applies after the employee completes one year of continuous service.
- Maximum entitlement: The total gratuity cannot exceed two years’ wages.
To calculate the daily basic salary, divide the monthly basic salary by 30. Then multiply the daily rate by the number of eligible gratuity days.
For example, an employee earning AED10,000 in monthly basic salary has a daily rate of AED333.33.
After five years of eligible service, the employee would qualify for 105 days of basic salary. This amounts to approximately AED35,000 under the standard calculation.
UAE gratuity calculator: Examples by salary and service
The following examples illustrate the standard calculation for eligible employees. They assume continuous qualifying service, no unpaid absence adjustments and an unchanged basic salary.
| Years of service | AED5,000 basic salary | AED10,000 basic salary |
|---|---|---|
| 1 year | AED3,500 | AED7,000 |
| 3 years | AED10,500 | AED21,000 |
| 5 years | AED17,500 | AED35,000 |
| 10 years | AED42,500 | AED85,000 |
For employees with more than five years of service, the first five years are calculated at the 21-day rate. Each additional year uses the 30-day rate.
Actual entitlements may vary depending on the employee’s circumstances and the legal provisions that apply. Employees should also check whether they fall under a different employment or end-of-service benefits arrangement.
UAE employers must settle final dues within 14 days
Article 53 of Federal Decree-Law No. 33 of 2021 requires employers to pay wages and other entitlements due to employees within 14 days of the employment contract ending.
The deadline covers more than gratuity alone. Final settlements may also include outstanding wages and payment for accrued but unused annual leave, where applicable.
Employees should review their final settlement carefully. They should compare the amount paid with their eligible service period, last basic salary and any other outstanding entitlements.
If a payment appears incorrect or remains outstanding beyond the deadline, employees can seek clarification from their employer or contact MOHRE for guidance.
UAE gratuity cap and alternative Savings Scheme
The standard UAE gratuity system caps the total payment at two years’ wages. Therefore, an employee cannot claim more than this limit under the standard calculation, even after a long period of service.
The UAE also offers a voluntary Savings Scheme as an alternative to the traditional end-of-service benefit arrangement.
Under this scheme, participating employers contribute to approved investment funds. The funds invest the contributions, giving employees the potential to earn returns.
However, the Savings Scheme operates differently from the standard gratuity system. Employees should check whether their employer participates and understand which rules govern their benefits.
What UAE employees should check before leaving a job
Employees preparing to leave a private-sector job should confirm three details before accepting their final settlement.
First, check the last basic salary used in the gratuity calculation. Second, verify the qualifying service period, including any unpaid absences. Finally, confirm that the employer settles all outstanding entitlements within the 14-day deadline.
Understanding these rules can help employees check their expected payment and identify discrepancies. For employers, accurate calculations and timely settlements are also important for meeting UAE labour law requirements.
MOHRE’s latest guidance serves as a reminder that gratuity remains a defined employment entitlement under the standard system, subject to eligibility rules and the applicable legal framework.
