End of Service Gratuity UAE: What Nobody in HR Will Tell You
End of Service Gratuity UAE: What Nobody in HR Will Tell You
You have been in the UAE for five years. You are planning your exit. And the number your company calculated as your gratuity is lower than what you expected.
The Legal Formula
Under Federal Decree-Law No. 33 of 2021, every employee who completes one year of continuous service is entitled to end-of-service gratuity. 21 calendar days of basic salary for each year of the first five years. 30 calendar days of basic salary for each year beyond five. Total gratuity cannot exceed two years of basic salary.
The keyword is basic salary. Not total package. Not gross salary. Basic salary only.
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The Daily Rate Calculation
The daily rate is your basic salary divided by 30. An employee with a 15,000 AED basic salary has a daily rate of 500 AED.
For the first five years: 500 x 21 x 5 = 52,500 AED. For years six through ten: 500 x 30 x 5 = 75,000 AED. Total after 10 years: 127,500 AED.
Resignation vs Termination
Under the 2021 law, employees who resign are entitled to full gratuity after completing one year. The previous reduction rule no longer applies for limited-term contracts.
If terminated for gross misconduct under Article 44, the employer may forfeit the gratuity entirely.
The DIFC and ADGM Exception
DIFC employers can opt into the DEWS scheme, which replaces statutory gratuity with a defined contribution savings plan. Employers contribute 5.83% of basic salary monthly (under five years) or 8.33% (over five years).
Common Employer Tactics That Reduce Your Payout
Salary restructuring before departure. Classifying regular payments as one-time bonuses. Deducting advances or loans from gratuity without proper documentation.
How to Protect Your Gratuity
Keep a copy of every employment contract. Request a gratuity estimate from HR before you resign. If you dispute the calculation, file a complaint with MOHRE within one year of your departure.
Your gratuity is earned money. Not a gift. Not a bonus. Know the formula. Check the calculation. Collect what is yours.
I write about the decisions that actually shape careers, not the ones that look good on paper.
