العربية
Русский
اردو
中文
Français
End of Service Benefits in UAE: Your Rights and Calculation
End-of-service gratuity in the UAE is a financial right of a foreign private-sector employee who has completed at least one continuous year of service. It is calculated on the last basic wage only, at 21 days’ wage for each of the first five years and 30 days for each subsequent year, with the total capped at two years’ wage. Under the current Labour Law the gratuity is paid in full whether the employee resigns or is terminated by the employer (no reduction), and is settled within 14 days of the contract end. In this guide from AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS, we explain your rights and the calculation method in detail, and provide an interactive calculator that gives your estimated amount instantly.
Calculate your end-of-service gratuity instantly with the interactive calculator below — built on the Ministry of Human Resources and Emiratisation formula — then read on for a detailed explanation and your rights:
End-of-Service Gratuity in the UAE: Your Rights and How to Calculate It
1. Who is entitled to end-of-service gratuity?
The gratuity is due to a foreign private-sector employee on a full-time work pattern who completes at least one continuous year of service, calculated under the federal Labour Law. UAE nationals are instead covered by pension and social-security schemes. Service must be continuous; days of unpaid absence are not counted within the service period.
2. How is the gratuity calculated?
First, the daily wage is found by dividing the monthly basic salary by 30. The employee then earns 21 days’ wage for each of the first five years, and 30 days’ wage for each year beyond five, with fractions of a year pro-rated once the first year is completed.
first 5 years
beyond 5 years
basis for counting days
Example: an employee with a basic salary of AED 10,000 and 8 years of service. Daily wage = 10,000 ÷ 30 = AED 333.33. First 5 years: 5 × 21 = 105 days. Next 3 years: 3 × 30 = 90 days. Total 195 days × 333.33 ≈ AED 65,000.
3. Resignation vs. termination — does the amount differ?
A major change under the current Labour Law is that resignation and employer termination earn the same gratuity, with no reduction, as long as the employee has completed one year of service. This differs from the repealed old law, which reduced a resigning employee’s gratuity (to one-third or two-thirds) depending on length of service.
Reduced to one-third (1–3 yrs) or two-thirds (3–5 yrs)
Full gratuity, no reduction
Full gratuity
Full gratuity
Distinction between limited and unlimited
One fixed-term contract; unified calculation
4. The cap and the settlement deadline
However long the service, the total end-of-service gratuity may not exceed two years’ wage of the basic salary. The employer must also pay the gratuity and all the employee’s dues within 14 days of the contract end date.
5. What is included and what is excluded?
The gratuity is calculated on the last basic wage only. All allowances are excluded (housing, transport, phone, etc.), and unpaid leave or absence days are excluded from the service period. The employer may deduct from the gratuity any amounts lawfully owed or due under a court judgment (such as loans and advances), subject to the prescribed conditions.
6. Important exceptions (not covered by this calculator)
The rules above apply to the private sector under the federal Labour Law. Employees of the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) are governed by separate regimes — notably the savings scheme (DEWS), based on monthly contributions instead of the traditional lump-sum gratuity and using a different calculation, which we cover in a separate article. Domestic workers are also subject to their own dedicated regulation. The calculator above is therefore designed specifically for the federal private sector.
7. What to do if your gratuity is delayed or reduced?
If the employer withholds, reduces, or delays the gratuity beyond the 14-day deadline, you may file a labour complaint with the Ministry of Human Resources and Emiratisation, which first seeks an amicable settlement and then refers the dispute to the competent court if needed. The employer may not withhold the gratuity merely because a dispute exists, because it is dissatisfied with performance, or because the employee resigned. Keep your employment contract, pay slips, and correspondence to strengthen your position.
Legal references
2- Cabinet Resolution No. 1 of 2022 on the Implementing Regulation of Federal Decree-Law No. 33 of 2021.
3- Cabinet Resolution No. 96 of 2023 on the voluntary Alternative End-of-Service Benefits Scheme (the Savings Scheme).
Frequently asked questions
The firm’s services across the Emirates
In Dubai, AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS provides integrated services in end-of-service gratuity matters, settlement of dues, labour complaints, arbitrary dismissal, and unpaid wages, representing clients before the Ministry of Human Resources and Emiratisation and the labour courts in Dubai, and drafting and reviewing employment contracts that protect both parties. If you are looking for a leading labour lawyer or law firm in Dubai, the firm is at your service.
The firm serves clients in Abu Dhabi, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah, handling end-of-service matters, labour disputes, and advisory work before federal and local authorities across the country, ensuring every employee and employer understands their rights and obligations in calculating and paying the gratuity accurately.
