UAE End-of-Service Gratuity: How It's Calculated in 2026

What Is End-of-Service Gratuity?

End-of-service gratuity is a lump-sum payment every employee receives when their employment contract ends in the UAE. It is calculated only on basic salary and is separate from any unpaid leave balance or final salary.

2026 Calculation Rules

The amount depends on how many years you have completed with the same employer. The first five years are paid at 21 days of basic salary per year. From year six onward the rate rises to 30 days of basic salary per year. Partial years are calculated pro-rata to the nearest month.

Only the basic salary figure listed in your MOHRE work contract is used. Allowances for housing, transport or education are excluded.

Step-by-Step Calculation Example

Take an employee with a basic salary of AED 12,000 who has worked exactly six years and four months.

• Years 1-5: 5 × 21 days = 105 days → 105 ÷ 30 = 3.5 months → 3.5 × AED 12,000 = AED 42,000
• Year 6 (four months): 4 ÷ 12 × 30 days = 10 days → 10 ÷ 30 = 0.33 months → 0.33 × AED 12,000 = AED 4,000
• Total gratuity: AED 46,000

Using the Official Calculator

MOHRE provides a free online gratuity calculator on its website. Enter your join date, end date and basic salary exactly as shown on your labour contract. The tool applies the correct 21-day and 30-day rates automatically and shows the final figure in AED.

When Payment Must Be Made

The employer must pay the full gratuity within 14 days of the last working day. If the contract ends because of resignation after less than five years, the employee receives a reduced amount unless the resignation follows an approved transfer. Always request a written breakdown of the gratuity from HR before signing the final settlement.

Common Mistakes to Avoid

• Using total salary instead of basic salary
• Forgetting to count only completed months for the final year
• Assuming the employer will automatically add unpaid overtime or leave pay to the gratuity figure

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Got more UAE questions?

Tovi knows current 2026 UAE rules, fees, and processes. Ask anything — visas, banking, housing, schools. Ask Tovi free →