How to Calculate Gratuity in the UAE (Article 51 Explained)
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Gratuity is based on your last basic salary only, not your total package.
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The daily wage is your monthly basic salary divided by 30.
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You earn 21 days of pay per year for the first five years and 30 days per year after that.
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You need at least one year of continuous service, and fractions of a year are paid pro-rata.
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The total is capped at two years of basic pay.
Quick answer: To calculate UAE gratuity, divide your monthly basic salary by 30 to get a daily wage, then multiply by 21 days for each of the first five years and by 30 days for each year beyond five. You must have completed at least one year of service, and the total cannot exceed two years of basic pay.
End-of-service gratuity is set out in Article 51 of Federal Decree-Law No. 33 of 2021, the labour law in force since 2 February 2022. This article is part of our complete guide to UAE end-of-service gratuity, and here we cover the exact method with examples.
Who qualifies for gratuity in the UAE?
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You are a full-time expatriate in the private sector under MoHRE (mainland or a MoHRE-regulated free zone).
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You have completed at least one year of continuous service. Below one year, no statutory gratuity is due.
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UAE and GCC nationals are excluded, because they accrue pension through the GPSSA.
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DIFC and ADGM run separate systems, so the 21 and 30-day formula does not apply there. Compare them in DIFC (DEWS) vs ADGM vs mainland gratuity.
Step 1: Use basic salary, not total salary
Gratuity uses your last basic wage. Housing, transport, utilities, and similar allowances are excluded. Because basic pay is often only 50 to 60 percent of a package, this is the single biggest cause of wrong numbers. For detail, see whether UAE gratuity is calculated on basic or total salary.
Step 2: Find your daily wage
Divide your monthly basic salary by 30. The law treats a month as 30 days.
Daily wage = monthly basic salary / 30
Gratuity = daily wage x 21 x (years up to 5) + daily wage x 30 x (years beyond 5)
Step 3: Apply the 21 and 30-day rule
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First 1 to 5 years: 21 days of basic wage for each year.
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Beyond 5 years: 30 days of basic wage for each additional year.
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Fractions of a year are paid pro-rata once you pass the one-year mark.
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The total can never exceed two years of basic wage.
Worked example: 7 years at 6,000 AED basic
| Step | Calculation | Result |
|---|---|---|
| Daily wage | 6,000 / 30 | 200 AED |
| First 5 years | 5 x 21 x 200 | 21,000 AED |
| Years 6 to 7 | 2 x 30 x 200 | 12,000 AED |
| Total gratuity | 21,000 + 12,000 | 33,000 AED |
The two-year cap here is 144,000 AED, so the full 33,000 AED is payable.
Skip the maths
Enter your basic salary and dates in the UAE gratuity calculator for an instant breakdown, with a mainland, DIFC, and ADGM toggle. The result is the same whether you resign or are terminated, as explained in resignation vs termination.
FAQ
Is gratuity calculated on basic or gross salary?
Basic salary only. Allowances are excluded.
Do I lose gratuity if I resign?
No. Since 2 February 2022, resignation and termination are treated the same.
Is there a maximum gratuity?
Yes. The total cannot exceed two years of basic wage.
When must it be paid?
Within 14 days of your last working day.
Sources and References
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Federal Decree-Law No. 33 of 2021 (UAE Labour Law), Article 51 on end-of-service gratuity
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Cabinet Resolution No. 1 of 2022 (Executive Regulations of the Labour Law)
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Ministry of Human Resources and Emiratisation, end-of-service guidance (mohre.gov.ae)
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UAE Government portal, end-of-service gratuity (u.ae)
This article is for general information and does not constitute legal advice. End-of-service entitlements and disputes should be reviewed with a qualified professional or the Ministry of Human Resources and Emiratisation (MoHRE).