MyCalculatorHow this is calculated
The daily wage is basic salary ÷ 30. For each of the first 5 years of service, you accrue 21 days' wage per year. For each year beyond 5, you accrue 30 days' wage per year. Total gratuity is capped at 2 years' total basic salary. Since the 2021 labour law reform, resignation and termination receive the same gratuity calculation — there's no longer a reduction for voluntary resignation.
Worked examples
AED 12,000 basic salary, 10 years: daily rate AED 400. First 5 years: 21 × 5 = 105 days. Next 5 years: 30 × 5 = 150 days. Total 255 days × AED 400 = AED 102,000.
AED 10,000 basic salary, 6 years: daily rate AED 333.33. First 5 years: 105 days = AED 35,000. 6th year: 30 days = AED 10,000. Total = AED 45,000.
Assumptions & limitations
- Calculated on basic salary only — housing, transport, and other allowances, bonuses and overtime are excluded by law.
- Requires a minimum of 1 full year of continuous service; less than a year earns no gratuity.
- Assumes UAE mainland or standard free zone employment — DIFC (DEWS savings plan) and ADGM (gratuity/savings choice) have separate schemes.
- Does not account for outstanding debt deductions or disputes over dismissal for cause, which can affect the final amount.
Sources
Federal Decree-Law No. 33 of 2021 Concerning the Regulation of Labour Relations, Article 51. See our sources page.
Frequently asked questions
Do I get full gratuity if I resign?
Yes. Since the 2021 labour law, resignation and termination are treated the same for gratuity purposes, provided you've completed at least 1 year of continuous service.
Are allowances included in the calculation?
No. Gratuity is calculated on basic salary only — housing, transport, utilities and other allowances are excluded under Article 51.
Is there a maximum gratuity amount?
Yes. Total gratuity is capped at 2 years' worth of basic salary, regardless of how many years you've worked.