How to Calculate Your UAE Gratuity (End of Service)
UAE gratuity is calculated on your basic salary, length of service, and resignation or termination reason. See the 2026 formula, caps, and examples.
What Is Gratuity in the UAE?
Gratuity, also called end-of-service benefit, is a lump-sum payment your employer must pay when your employment contract ends. It is governed by the UAE Labour Law and calculated by MOHRE. The amount depends on your basic salary, years worked, and whether you resigned or were terminated.
Who Is Entitled to Gratuity?
Full-time employees on limited or unlimited contracts qualify after completing at least one year of continuous service. Domestic workers, free-zone employees under different rules, and those dismissed for gross misconduct are excluded or receive reduced amounts. Part-time and temporary staff are assessed case-by-case by MOHRE.
2026 Gratuity Formula
Calculate your entitlement using these steps. First, identify your basic salary from your contract. Exclude allowances, overtime, and commissions. Then apply the tiers below.
- 1 to 5 years: 21 days of basic salary per year
- More than 5 years: 30 days of basic salary per year for each year after year five
Maximum payout is capped at the basic salary for two years. If your contract ends before one full year, you receive nothing unless the employer terminates without cause.
Worked Example
Ahmed earns AED 15,000 basic salary monthly and leaves after seven years. Years 1-5 give 21 days each: 5 x 21 x 500 = AED 52,500. Years 6-7 give 30 days each: 2 x 30 x 500 = AED 30,000. Total gratuity is AED 82,500, below the two-year cap of AED 360,000.
Resignation Versus Termination
If you resign with less than five years of service, you receive a reduced amount set by MOHRE. After five years, full gratuity applies on resignation. Termination without cause always triggers the full calculation. Always request a final settlement statement from your employer within 14 days of your last working day.
Payment Timeline and Disputes
Your employer must pay gratuity with your final salary within 30 days. If payment is delayed or disputed, file a complaint through the MOHRE app or a MOHRE service centre. Keep copies of your contract, salary slips, and visa to speed up the process. MOHRE decisions are usually issued within two weeks.
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Frequently asked questions
Is gratuity paid on total salary or basic salary?▾
Gratuity uses only your basic salary stated in the contract. Allowances and overtime are excluded.
What is the maximum gratuity amount in 2026?▾
The cap equals two years of basic salary, regardless of total years worked.
How long does MOHRE take to resolve a gratuity dispute?▾
Most cases receive a decision within two weeks after you submit the complaint.
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