UAE Gratuity FAQ
Quick, plain-language answers to the questions UAE employees ask most about end of service gratuity — grouped by topic so you can jump straight to what you need.
Last reviewed: 19 June 2026
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Eligibility & service
No. You must complete at least one full year of continuous service to be eligible for end of service gratuity.
You earn 21 days of basic wage for each of the first five years, and 30 days of basic wage for each year after five years.
Yes. Total gratuity is capped at the equivalent of two years' basic wage.
Unpaid leave is generally excluded from qualifying service, so it slightly reduces the service length used. Paid annual leave still counts.
Eligible part-time employees can receive gratuity, generally calculated proportionally to their hours compared with full-time. See our part-time gratuity page and confirm the exact method with official sources.
Salary & what counts
Basic salary only. Allowances such as housing and transport are excluded. See basic vs gross salary.
No. Housing, transport and other allowances are excluded. Only the basic salary is used.
No. Overtime is not part of the basic wage and is excluded from the calculation.
No. Bonuses, commissions and incentives are not part of the basic wage and are excluded.
The daily wage is your monthly basic salary divided by 30. It is then multiplied by 21 or 30 days per year of service.
Gratuity is generally based on your last basic salary. If your pay changed, confirm the figure used with your employer or official guidance.
Resignation, termination & special cases
Under the current standard formula, resignation does not reduce your gratuity once you have completed one year of service. See resignation gratuity.
Yes. Lawful termination uses the same 21/30-day calculation, provided you have completed at least one year of service.
In certain narrow situations defined in the law, such as dismissal for specific serious misconduct, end of service entitlement can be affected. These cases are limited — confirm with official sources or seek advice.
Most free zones broadly follow similar principles, but financial free zones such as DIFC and ADGM operate their own regulations, including savings schemes like DEWS in DIFC.
Domestic workers are covered by a separate law rather than the standard private-sector labour law, with its own end of service provisions.
No. End of service gratuity is a one-time lump sum based on basic salary and service. It is different from any pension or savings scheme.
Process, timing & doing it yourself
The UAE does not levy personal income tax on individual salaries or end of service gratuity. Confirm your personal situation with a qualified advisor.
Gratuity is generally paid as part of your final settlement within a short period after your last working day, alongside any unpaid salary and leave encashment.
No. Leave encashment and gratuity are separate items, though both are usually paid together in your final settlement. See annual leave.
Yes. Work out your daily wage (basic ÷ 30), multiply by 21 days per year for the first five years and 30 days afterwards, and apply the two-year cap. Our free calculator does this automatically.
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Open the CalculatorOfficial sources & further reading
Confirm details with the UAE Government portal (u.ae) and MOHRE. On this site, see the gratuity guide, the UAE Labour Law overview, and the notice period guide.