UAE Gratuity 2026 – Your Complete Guide to End-of-Service Benefits
If you work in the UAE private sector, you are legally entitled to a gratuity payment when you leave your job. This is commonly called End-of-Service Benefits (EOSB) — and it can be a significant amount of money, especially if you’ve worked for several years with the same employer.
Yet many employees in the UAE don’t fully understand how gratuity is calculated, when they’re eligible, or what happens if they resign versus being terminated. This guide covers all of that in plain language.
What is Gratuity in the UAE?
Gratuity is a mandatory lump-sum payment that every private-sector employer in the UAE must provide to an eligible employee at the end of their service. It is calculated based on your basic salary and how many years you’ve worked with that employer.
It applies to all expatriate private-sector workers. UAE nationals are covered by social security, so different rules apply to them. Domestic workers may also be eligible — check with MOHRE for specific guidance.
Who is Eligible?
Under Federal Decree-Law No. 33 of 2021, which has been in effect since February 2, 2022:
- You must have completed at least 1 year of continuous service with the same employer
- Days of unpaid leave are excluded from the service calculation
- The type of contract (limited or unlimited) no longer affects the gratuity formula — the same calculation applies to both
- Free zone employees may fall under separate rules depending on their specific free zone authority
How is UAE Gratuity Calculated? (The 21-Day and 30-Day Formula)
The official formula under UAE Labour Law is:
- First 5 years of service: 21 days of basic salary per completed year
- After 5 years: 30 days of basic salary per completed year
- Maximum cap: Gratuity cannot exceed 2 years’ total basic salary, regardless of how long you’ve worked
The daily wage is calculated as: Monthly Basic Salary ÷ 30
Example Calculation
Let’s say your basic monthly salary is AED 5,000 and you’ve worked for 7 years:
- Daily wage = AED 5,000 ÷ 30 = AED 166.67
- First 5 years: 21 days × 5 = 105 days × AED 166.67 = AED 17,500
- Years 6 and 7: 30 days × 2 = 60 days × AED 166.67 = AED 10,000
- Total gratuity = AED 27,500
Note: Gratuity is calculated on your basic salary only — not your total salary. Housing allowance, transport, food allowance, and other extras are not included.
What If You Resign?
Resignation does not disqualify you from gratuity — as long as you’ve completed at least 1 year of continuous service. Under the current UAE Labour Law, the same formula applies whether you resign or are terminated (unless termination was due to serious misconduct).
What If You Are Terminated?
If your employer terminates your contract without proven serious misconduct, you are entitled to full gratuity based on the standard formula. Employers are required to pay gratuity and all end-of-service settlements within 14 days of the contract ending. Delays may result in MOHRE complaints and potential court referrals.
What Is NOT Included in Gratuity?
- Unused annual leave days are calculated separately — not added to gratuity
- Housing, transport, food, and other allowances are excluded from the gratuity base
- Overtime payments are not part of the gratuity calculation
How to Use the Official MOHRE Gratuity Calculator
The Ministry of Human Resources and Emiratisation (MOHRE) provides an official online tool to help workers estimate their end-of-service benefits. To use it:
- Visit the MOHRE website at mohre.gov.ae
- Enter your basic monthly salary
- Enter your start and end dates of service
- Select your contract type
- The tool provides an instant breakdown of your estimated entitlement
Several third-party MOHRE-aligned calculators are also available and comply with the current Federal Decree-Law. Always verify the result with your HR department or MOHRE directly before any final settlement.
What to Do If Your Employer Doesn’t Pay Gratuity
If you are not paid your rightful gratuity, you have options:
- File a complaint through the MOHRE app or website
- Call the MOHRE helpline at 800 60
- If unresolved, the case can be referred to the Labour Court
Employers who fail to pay gratuity face legal penalties. Your rights are protected under UAE Labour Law.
Final Advice
Your gratuity is a legal right — not a bonus. Whether you’ve worked 2 years or 12, understanding how it’s calculated helps you plan your finances and negotiate from an informed position when leaving a job.
Always keep records of your salary slips, employment contract, and service dates. These documents are essential if any dispute arises.
For more UAE Labour Law guides, salary information, and career resources, stay connected with Career Hub Dubai.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For official guidance, contact MOHRE directly at mohre.gov.ae or call 800 60.