UAE Gratuity Guide 2026

Last reviewed: 19 June 2026

This guide walks you through every part of a UAE gratuity calculation in plain language. It is educational guidance, not legal advice — see our disclaimer.

Step 1 — Find your basic salary

Gratuity is calculated on your basic salary, not your total or gross package. Look at your contract or pay slip and separate the basic component from allowances such as housing, transport and mobile. Only the basic figure is used.

Step 2 — Work out your daily wage

The daily wage is your monthly basic salary divided by 30.

Step 3 — Count your years of service

Calculate the full period from your joining date to your last working day. You must complete at least one full year to qualify. If you took unpaid leave, subtract those days, because unpaid leave is generally excluded from qualifying service.

Step 4 — Apply the 21-day and 30-day rules

• First 5 years: 21 days of basic wage for each year.
• After 5 years: 30 days of basic wage for each additional year.

Step 5 — Check the two-year cap

Total gratuity cannot exceed two years' basic wage. If your calculated amount is higher, it is capped at this ceiling.

Step 6 — Remember what does not reduce it

Worked example

An employee with a basic salary of AED 6,000 who worked for 7 years:

• Daily wage = 6,000 ÷ 30 = AED 200
• First 5 years = 200 × 21 × 5 = AED 21,000
• Next 2 years = 200 × 30 × 2 = AED 12,000
• Total estimated gratuity = AED 33,000 (below the two-year cap of AED 144,000)

Next steps

Planning to leave a job? Read about your UAE notice period and exactly how gratuity after resignation is calculated under the current rules.