UAE Gratuity Calculator 2026
Calculate your end of service gratuity in under 30 seconds
Resigning or being let go makes no difference: under Federal Decree-Law No. 33 of 2021 your gratuity entitlement is the same either way. The old resignation reduction (Law No. 8 of 1980) no longer applies.
Last updated: June 2026 | Based on current UAE Labour Law
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How UAE Gratuity Works Under the 2021 Labour Law
The UAE gratuity entitlement is governed by Federal Decree-Law No. 33 of 2021, Article 51. Every employee who completes at least one year of continuous service is entitled to an end-of-service gratuity. The calculation is based on your basic salary only — housing, transport, and other allowances are excluded. Your employer must pay this amount within 14 days of your last working day.
Under the current law, all employment contracts are classified as fixed-term. If you joined before February 2022 on an unlimited contract, transitional rules apply and your gratuity is calculated on the same Article 51 formula. The key distinction is no longer the contract type — it is your length of service and the reason your employment ends.
How Service Length Affects Your Gratuity
For the first five years of service, you receive 21 days of basic salary per year. From year six onwards, you receive 30 days of basic salary per year. The total gratuity is capped at two years’ total basic salary, regardless of how long you have worked. So if you have worked 20 years, your gratuity is still capped at the equivalent of 24 months of basic pay.
In my experience, the most common point of confusion is calculating the daily rate correctly. Divide your monthly basic salary by 30 to get the daily rate — not by the number of working days in that month. The law uses a 30-day month for this purpose.
Does Resignation Reduce Your Gratuity?
Previously, unlimited-contract employees who resigned before completing five years received a reduced gratuity. Under Decree-Law No. 33 of 2021, that penalty no longer applies. You are entitled to the full gratuity based on your service length, whether you resign or your contract ends for any other reason. The only situation that forfeits gratuity entirely is termination for gross misconduct under Article 44.
As an HR professional who has reviewed end-of-service calculations across many organisations, I find the most common employer error is still applying the old reduction rules for resignations. Know your rights and always request a written calculation breakdown.
Frequently Asked Questions
Is UAE gratuity taxable?
No. The UAE does not impose personal income tax, so your gratuity payment is received in full with no deductions for tax. This applies to both UAE nationals and expatriates.
Does gratuity include allowances such as housing or transport?
No. Gratuity is calculated on basic salary only. Housing allowance, transport allowance, commissions, and other benefits are excluded from the gratuity base under Article 51 of the Federal Decree-Law No. 33 of 2021.
What happens to my gratuity if my company closes down?
If your employer ceases operations, your gratuity remains a protected liability. MOHRE (Ministry of Human Resources and Emiratisation) can assist with claims through the Wages Protection System and the labour court if necessary. Always register a formal complaint with MOHRE as a first step.
Can an employer deduct debts from my gratuity?
Yes, but only within limits. An employer may deduct outstanding loans or advances from your gratuity, provided these were formally agreed in writing. They cannot deduct arbitrary penalties. Any deduction must be documented and a written statement provided to the employee.
Use the Calculator Above
Enter your basic monthly salary, start date, and end date in the calculator above to get an instant, accurate gratuity estimate based on UAE law. The result reflects the current rules under Federal Decree-Law No. 33 of 2021 and is updated for 2026. Always cross-check with your HR department or employment contract for final confirmation.
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Subscribe Now 👉How UAE Gratuity Works Under the 2021 Labour Law
The UAE gratuity entitlement is governed by Federal Decree-Law No. 33 of 2021, Article 51. Every employee who completes at least one year of continuous service is entitled to an end-of-service gratuity. The calculation is based on your basic salary only — housing, transport, and other allowances are excluded. Your employer must pay this amount within 14 days of your last working day.
Under the current law, all employment contracts are classified as fixed-term. If you joined before February 2022 on an unlimited contract, transitional rules apply and your gratuity is calculated on the same Article 51 formula. The key distinction is no longer the contract type — it is your length of service and the reason your employment ends.
How Service Length Affects Your Gratuity
For the first five years of service, you receive 21 days of basic salary per year. From year six onwards, you receive 30 days of basic salary per year. The total gratuity is capped at two years’ total basic salary, regardless of how long you have worked. So if you have worked 20 years, your gratuity is still capped at the equivalent of 24 months of basic pay.
In my experience, the most common point of confusion is calculating the daily rate correctly. Divide your monthly basic salary by 30 to get the daily rate — not by the number of working days in that month. The law uses a 30-day month for this purpose.
Does Resignation Reduce Your Gratuity?
Previously, unlimited-contract employees who resigned before completing five years received a reduced gratuity. Under Decree-Law No. 33 of 2021, that penalty no longer applies. You are entitled to the full gratuity based on your service length, whether you resign or your contract ends for any other reason. The only situation that forfeits gratuity entirely is termination for gross misconduct under Article 44.
As an HR professional who has reviewed end-of-service calculations across many organisations, I find the most common employer error is still applying the old reduction rules for resignations. Know your rights and always request a written calculation breakdown.
Frequently Asked Questions
Is UAE gratuity taxable?
No. The UAE does not impose personal income tax, so your gratuity payment is received in full with no deductions for tax. This applies to both UAE nationals and expatriates.
Does gratuity include allowances such as housing or transport?
No. Gratuity is calculated on basic salary only. Housing allowance, transport allowance, commissions, and other benefits are excluded from the gratuity base under Article 51 of the Federal Decree-Law No. 33 of 2021.
What happens to my gratuity if my company closes down?
If your employer ceases operations, your gratuity remains a protected liability. MOHRE (Ministry of Human Resources and Emiratisation) can assist with claims through the Wages Protection System and the labour court if necessary. Always register a formal complaint with MOHRE as a first step.
Can an employer deduct debts from my gratuity?
Yes, but only within limits. An employer may deduct outstanding loans or advances from your gratuity, provided these were formally agreed in writing. They cannot deduct arbitrary penalties. Any deduction must be documented and a written statement provided to the employee.
Use the Calculator Above
Enter your basic monthly salary, start date, and end date in the calculator above to get an instant, accurate gratuity estimate based on UAE law. The result reflects the current rules under Federal Decree-Law No. 33 of 2021 and is updated for 2026. Always cross-check with your HR department or employment contract for final confirmation.
👉 Enjoying this content?
Stay updated with more insightful articles and tips by subscribing to our newsletter.
Subscribe Now 👉How UAE Gratuity Works Under the 2021 Labour Law
The UAE gratuity entitlement is governed by Federal Decree-Law No. 33 of 2021, Article 51. Every employee who completes at least one year of continuous service is entitled to an end-of-service gratuity. The calculation is based on your basic salary only — housing, transport, and other allowances are excluded. Your employer must pay this amount within 14 days of your last working day.
Under the current law, all employment contracts are classified as fixed-term. If you joined before February 2022 on an unlimited contract, transitional rules apply and your gratuity is calculated on the same Article 51 formula. The key distinction is no longer the contract type — it is your length of service and the reason your employment ends.
How Service Length Affects Your Gratuity
For the first five years of service, you receive 21 days of basic salary per year. From year six onwards, you receive 30 days of basic salary per year. The total gratuity is capped at two years’ total basic salary, regardless of how long you have worked. So if you have worked 20 years, your gratuity is still capped at the equivalent of 24 months of basic pay.
In my experience, the most common point of confusion is calculating the daily rate correctly. Divide your monthly basic salary by 30 to get the daily rate — not by the number of working days in that month. The law uses a 30-day month for this purpose.
Does Resignation Reduce Your Gratuity?
Previously, unlimited-contract employees who resigned before completing five years received a reduced gratuity. Under Decree-Law No. 33 of 2021, that penalty no longer applies. You are entitled to the full gratuity based on your service length, whether you resign or your contract ends for any other reason. The only situation that forfeits gratuity entirely is termination for gross misconduct under Article 44.
As an HR professional who has reviewed end-of-service calculations across many organisations, I find the most common employer error is still applying the old reduction rules for resignations. Know your rights and always request a written calculation breakdown.
Frequently Asked Questions
Is UAE gratuity taxable?
No. The UAE does not impose personal income tax, so your gratuity payment is received in full with no deductions for tax. This applies to both UAE nationals and expatriates.
Does gratuity include allowances such as housing or transport?
No. Gratuity is calculated on basic salary only. Housing allowance, transport allowance, commissions, and other benefits are excluded from the gratuity base under Article 51 of the Federal Decree-Law No. 33 of 2021.
What happens to my gratuity if my company closes down?
If your employer ceases operations, your gratuity remains a protected liability. MOHRE (Ministry of Human Resources and Emiratisation) can assist with claims through the Wages Protection System and the labour court if necessary. Always register a formal complaint with MOHRE as a first step.
Can an employer deduct debts from my gratuity?
Yes, but only within limits. An employer may deduct outstanding loans or advances from your gratuity, provided these were formally agreed in writing. They cannot deduct arbitrary penalties. Any deduction must be documented and a written statement provided to the employee.
Use the Calculator Above
Enter your basic monthly salary, start date, and end date in the calculator above to get an instant, accurate gratuity estimate based on UAE law. The result reflects the current rules under Federal Decree-Law No. 33 of 2021 and is updated for 2026. Always cross-check with your HR department or employment contract for final confirmation.
👉 Enjoying this content?
Stay updated with more insightful articles and tips by subscribing to our newsletter.
Subscribe Now 👉How UAE Gratuity Works Under the 2021 Labour Law
The UAE gratuity entitlement is governed by Federal Decree-Law No. 33 of 2021, Article 51. Every employee who completes at least one year of continuous service is entitled to an end-of-service gratuity. The calculation is based on your basic salary only — housing, transport, and other allowances are excluded. Your employer must pay this amount within 14 days of your last working day.
Under the current law, all employment contracts are classified as fixed-term. If you joined before February 2022 on an unlimited contract, transitional rules apply and your gratuity is calculated on the same Article 51 formula. The key distinction is no longer the contract type — it is your length of service and the reason your employment ends.
How Service Length Affects Your Gratuity
For the first five years of service, you receive 21 days of basic salary per year. From year six onwards, you receive 30 days of basic salary per year. The total gratuity is capped at two years’ total basic salary, regardless of how long you have worked. So if you have worked 20 years, your gratuity is still capped at the equivalent of 24 months of basic pay.
In my experience, the most common point of confusion is calculating the daily rate correctly. Divide your monthly basic salary by 30 to get the daily rate — not by the number of working days in that month. The law uses a 30-day month for this purpose.
Does Resignation Reduce Your Gratuity?
Previously, unlimited-contract employees who resigned before completing five years received a reduced gratuity. Under Decree-Law No. 33 of 2021, that penalty no longer applies. You are entitled to the full gratuity based on your service length, whether you resign or your contract ends for any other reason. The only situation that forfeits gratuity entirely is termination for gross misconduct under Article 44.
As an HR professional who has reviewed end-of-service calculations across many organisations, I find the most common employer error is still applying the old reduction rules for resignations. Know your rights and always request a written calculation breakdown.
Frequently Asked Questions
Is UAE gratuity taxable?
No. The UAE does not impose personal income tax, so your gratuity payment is received in full with no deductions for tax. This applies to both UAE nationals and expatriates.
Does gratuity include allowances such as housing or transport?
No. Gratuity is calculated on basic salary only. Housing allowance, transport allowance, commissions, and other benefits are excluded from the gratuity base under Article 51 of the Federal Decree-Law No. 33 of 2021.
What happens to my gratuity if my company closes down?
If your employer ceases operations, your gratuity remains a protected liability. MOHRE (Ministry of Human Resources and Emiratisation) can assist with claims through the Wages Protection System and the labour court if necessary. Always register a formal complaint with MOHRE as a first step.
Can an employer deduct debts from my gratuity?
Yes, but only within limits. An employer may deduct outstanding loans or advances from your gratuity, provided these were formally agreed in writing. They cannot deduct arbitrary penalties. Any deduction must be documented and a written statement provided to the employee.
Use the Calculator Above
Enter your basic monthly salary, start date, and end date in the calculator above to get an instant, accurate gratuity estimate based on UAE law. The result reflects the current rules under Federal Decree-Law No. 33 of 2021 and is updated for 2026. Always cross-check with your HR department or employment contract for final confirmation.
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Stay updated with more insightful articles and tips by subscribing to our newsletter.
Subscribe Now 👉