UAE Gratuity (End-of-Service Benefits) Guide
When you finish a job in the UAE, you’re entitled to an end-of-service gratuity — a lump sum based on how long you worked and your basic salary. It’s one of the most valuable rights you have as a worker, and also one of the most misunderstood. This guide explains how it’s calculated, who qualifies, and how resignation versus termination affects what you get.
What is end-of-service gratuity
Gratuity is a statutory payment your employer owes you when your employment ends, provided you’ve completed at least one year of continuous service. It’s effectively a reward for your service, set by UAE labour law — not a bonus the employer can choose to skip.
Two things decide the amount: your basic salary and your length of service.
Quick estimate: use our free UAE gratuity calculator — enter your basic salary and years of service to see your end-of-service figure instantly (in your browser, nothing uploaded).
How gratuity is calculated
The standard formula is based on your basic salary only (allowances like housing and transport are excluded):
- First 5 years: about 21 days’ basic pay for each year of service.
- After 5 years: about 30 days’ basic pay for each additional year.
- Overall cap: total gratuity is generally capped at two years’ worth of pay.
A simple way to think about it: take your basic monthly salary, work out a daily rate, then multiply by 21 (or 30) days per year of service. Part-years after the first year are usually counted pro-rata. Because the calculation uses basic salary, a contract with a low basic and high allowances produces a smaller gratuity — worth checking before you sign.
Resignation vs termination
Under the current UAE labour law (which moved most workers to limited-term contracts), gratuity is generally payable on completing at least a year, whether you resign or are terminated — but details depend on your contract and notice:
- Completing your contract / being terminated (not for cause): you’re entitled to your full earned gratuity.
- Resigning: you keep your gratuity once you’ve passed one year of service, provided you serve your notice properly.
- Always serve your notice period and follow the contract — leaving without notice can affect what you’re owed.
When gratuity can be reduced or lost
- Under one year of service — generally no gratuity.
- Dismissal for gross misconduct under the specific grounds in the law can mean loss of gratuity.
- Unpaid leave is usually not counted toward your length of service.
Protect yourself: Keep copies of your contract, salary slips and your basic salary figure. If your gratuity is withheld or miscalculated, you can raise a complaint with MOHRE. And remember — it’s illegal for an employer to confiscate your passport or Emirates ID; if that happens, it’s a serious red flag (see avoiding job scams).
Official resources
Planning your move or next role? See the UAE work visa process and browse current jobs in Dubai.
Frequently asked questions
How is UAE gratuity calculated?
It's based on your basic salary (not your total package) and your length of service — broadly 21 days' basic pay for each of the first five years, and 30 days' basic pay for each year after that, up to a cap of two years' total pay. Always confirm against the current MOHRE rules and your contract.
Do I get gratuity if I resign?
Yes, as long as you've completed at least one full year of continuous service. Your full gratuity is normally payable on completing your service; very short service (under a year) generally means no gratuity.
Is gratuity based on basic salary or total salary?
Basic salary only. Allowances such as housing, transport and commissions are usually excluded from the gratuity calculation — which is why your basic-to-allowance split in your contract matters.