Federal Decree-Law No. 33 of 2021 • Article 51

UAE Gratuity Calculator

Calculate your End of Service Benefit (EOSB) under the modern UAE Labour Law. Enter your basic monthly salary and dates of service to instantly determine your statutory gratuity entitlement.

Employment Details

AED
Quick Duration PresetsSet common tenures from start date
Estimated End of Service Gratuity
AED 33,600.00
Eligible • Full Gratuity Entitlement
Total Continuous Service
4 yrs, 0 mos
Daily Basic Wage (Basic/30)
AED 400.00
First 5 Yrs (21 Days/Yr)
AED 33,600.00
Beyond 5 Yrs (30 Days/Yr)
AED 0.00
Statutory Maximum Cap: AED 288,000.00 (24 months basic salary).
Legal Disclaimer:Estimate only. Actual end-of-service benefits may vary based on employment terms, specific contract clauses, employer-sponsored savings schemes (such as the Dubai Workplace Savings Scheme), or applicable UAE free zone regulations. Not legal advice.

How is UAE Gratuity Calculated? (Article 51 Guide)

Under the UAE Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (which superseded the 1980 Labour Law), end-of-service gratuity calculation rules were modernized and streamlined across the private sector:

Continuous Service LengthGratuity Entitlement RateEligibility Status
Less than 1 Year (< 365 Days)0 DaysNot Eligible
1 Year to 5 Years21 days' basic wage for each year of serviceFull Gratuity
Beyond 5 Years30 days' basic wage for each additional yearFull Gratuity
Maximum Payout CeilingCapped at 2 years' (24 months) basic wageStatutory Cap

Key Rules to Keep in Mind

  • Daily Wage Basis: Article 51 establishes that the daily wage is computed as the employee's basic monthly salary divided by 30 days:Daily Wage = Basic Salary ÷ 30.
  • Allowances are Excluded: Housing, transport, utilities, commissions, and performance bonuses are excluded from the gratuity base.
  • Pro-Rata Fractions: If you work for 3 years, 4 months, and 12 days, your gratuity will be calculated on an exact pro-rata basis for the fractional days, provided you have satisfied the initial 1-year threshold.
  • Resignation vs. Termination: Under the 2021 law, all private contracts in the UAE are fixed-term (limited) contracts. As long as you fulfill your contractual notice period (minimum 30 days, maximum 90 days), there is no statutory reduction of gratuity upon voluntary resignation.

Worked Example

An employee with a Basic Salary of AED 12,000 resigns after completing exactly 7 years of continuous service:

  • Daily Basic Wage: AED 12,000 ÷ 30 = AED 400
  • First 5 Years: 5 × 21 days = 105 days × AED 400 = AED 42,000
  • Remaining 2 Years: 2 × 30 days = 60 days × AED 400 = AED 24,000
  • Total Calculated Gratuity: AED 42,000 + AED 24,000 = AED 66,000
  • Maximum Statutory Cap: 24 months × AED 12,000 = AED 288,000 (well within the cap).

UAE Gratuity Frequently Asked Questions

How is End of Service Gratuity calculated under Federal Decree-Law No. 33 of 2021?

Under Article 51 of the UAE Labour Law: (1) Less than 1 full year of continuous service = 0 AED. (2) For the first 5 years of service = 21 days of basic salary for each year. (3) For any continuous service beyond 5 years = 30 days of basic salary for each additional year. (4) Partial years are calculated on a pro-rata basis. (5) Total gratuity is statutory capped at a maximum of 24 months (2 years) basic wage.

Does an employee get gratuity if they resign before 1 year of service?

No. Under Article 51 (Paragraph 1), a full-time worker must complete a minimum of one full calendar year (365 days) of continuous service with the employer to be legally entitled to end-of-service gratuity.

Are allowances (housing, transport, utilities) included in the gratuity calculation?

No. Gratuity in the UAE is calculated strictly on the employee’s last drawn basic wage. Allowances such as accommodation, transportation allowance, mobile phone stipends, and discretionary sales commissions are excluded by law.

What is the maximum statutory cap on UAE gratuity payouts?

Under Article 51 (Paragraph 5), the total aggregate end-of-service gratuity cannot exceed two years’ basic wage (24 months × basic monthly salary). Even if an employee works for 25 or 30 years with the same firm, the legal payout cannot exceed 24 months’ basic salary.

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