UAE End-of-Service Gratuity in 2026: How It Is Calculated, What Can Be Deducted and How to Claim It

If you work in the UAE mainland private sector and have completed at least one year of continuous service, you are owed an end-of-service gratuity when your contract ends. It is 21 days’ basic wage for each of your first five years and 30 days for each year after that. Your employer must pay it within 14 days of the contract ending. If it does not, you have two years from the end of your employment to claim it.

These rules come from Federal Decree-Law No. 33 of 2021, the current UAE Labour Law. The DIFC and ADGM have their own rules, covered at the end. For an overview of the 2021 law, see our 10 key questions about the new UAE labour law.

Who is entitled to gratuity

Article 51 gives gratuity to full-time foreign employees once they complete one year of continuous service. Leave earlier and you receive nothing. Part years after the first count pro rata, so three years and four months earns gratuity for the four months too.

Your probation period counts if you passed it (Art. 9), and each renewal of a fixed-term contract adds to your service. If you keep working after a contract expires, the law treats the contract as extended (Art. 8). Unpaid absence does not count (Art. 51(4)).

UAE nationals receive end-of-service benefits under the pensions and social security law rather than the Article 51 formula (Art. 51(1)). GCC nationals are covered by their home country’s pension scheme through the GCC insurance extension system, and employers contribute for them as they do for Emiratis.

How gratuity is calculated

Multiply your daily basic wage by the days you have earned: 21 for each of the first five years of service and 30 for each year after that, with part years pro rata. The UAE government portal summarises the rules on its end-of-service benefits page.

The daily rate

Article 67 counts a month as 30 days and a year as 365 days, which supports dividing your monthly basic wage by 30. Dividing your annual basic wage by 365 gives a slightly lower daily rate. If your figure and your employer’s differ slightly, check the divisor first.

What counts as basic wage

Gratuity is based on your last basic wage. Housing, transport and similar allowances are excluded (Arts. 1 and 51(5)). The mainland law sets no minimum ratio between basic wage and total pay, so a package with a low basic wage and large allowances produces a smaller gratuity.

The two-year cap

Article 51(6) caps total gratuity at “two years’ wage”. The law defines wage as basic wage plus allowances, but many published guides read the cap as two years’ basic wage. Under either reading, only employees with very long service reach it. If you are close to it, take advice.

Part-time work

A part-time employee receives a percentage of the full-time gratuity, found by dividing contract hours by full-time hours and multiplying by 100. Temporary work lasting less than a year earns no gratuity.

Worked examples

The examples below are illustrations. Each uses the last monthly basic wage only, with no allowances, and divides it by 30 to find the daily rate. They assume continuous service, with any unpaid leave already taken out.

Example 1: three years’ service, basic wage AED 10,000 a month. Days earned: 3 × 21 = 63. Gratuity: 10,000 ÷ 30 × 63 = AED 21,000. On a 365-day basis it would be 120,000 ÷ 365 × 63 = about AED 20,712.

Example 2: seven years and six months, basic wage AED 15,000 a month. Days earned: (5 × 21) + (2.5 × 30) = 105 + 75 = 180. Gratuity: 15,000 ÷ 30 × 180 = AED 90,000.

Example 3: part time, 1,040 contract hours against 2,080 full-time hours. The employee works 50% of full-time hours and so receives 50% of the full-time gratuity. Taking the AED 21,000 from example 1 as the full-time figure, the part-time gratuity is AED 10,500.

Resignation, dismissal and Article 44

How the contract ends does not change the formula. Article 51 contains no reduction for resigning and no forfeiture rule. Some online guides still cut gratuity for resignation, following the 1980 Labour Law, which was repealed from 2 February 2022.

The same applies to dismissal:

• Dismissal imposed as a disciplinary penalty preserves end-of-service benefits (Art. 39). See our guide to disciplinary sanctions in the UAE.
• Article 44 allows dismissal without notice on the grounds it lists, after a written investigation and a reasoned written decision. No provision of the law takes away gratuity after an Article 44 dismissal.
• An employee who leaves without notice under Article 45 keeps end-of-service rights.
• If the dismissal is unlawful under Article 47, for example because the employee filed a genuine complaint with MOHRE or a lawsuit against the employer, the court can also award compensation of up to three months’ wage on top of notice pay and gratuity.

Contracts made before February 2022

For unlimited (undefined-term) contracts made under the 1980 law, Article 68(3) says the employer “may calculate the end of service benefits in accordance with” that law. If you had such a contract and your employer’s figure is lower than the formula gives, get advice before you accept it.

What your employer can deduct

Article 51(7) lets the employer deduct amounts due from you “under the law or a judgment”, and it can also recover amounts you owe it. Ask for a written breakdown showing each deduction and the law, judgment or debt it relies on. Check the basic wage and service dates against your contract and payslips.

Raise any disagreement in writing. Before you sign a final settlement or release, read our guide to settlement agreements in the UAE.

When gratuity must be paid

Your employer must pay all end-of-service dues, gratuity included, within 14 days of the contract ending (Art. 53).

If your employer has enrolled you in the alternative end-of-service savings scheme set up by Cabinet Resolution 96/2023, it pays 5.83% of your basic wage each month while you have less than five years’ service, and 8.33% after that. The gratuity you earned before enrolment must be settled, and you are paid within 14 days of leaving. The scheme covers the private sector and free zones and is voluntary for employers. MOHRE issued guidance on it in November 2025 and ran a consultation in February 2026.

How to claim unpaid gratuity through MOHRE and the courts

File a complaint with the Ministry of Human Resources and Emiratisation (MOHRE) through its website or app. MOHRE can settle a dispute of any value by agreement, and since 1 January 2024 it can also decide claims of up to AED 50,000 itself. Decree-Law 20/2023 gave it that power, and Decree-Law 9/2024 restated it in a new Article 54. MOHRE’s decision is enforceable. A party who disagrees can challenge it before the Court of First Instance within 15 working days, and the court rules within 30 working days. Its judgment is final.

If MOHRE cannot settle a larger claim, it refers the dispute to court, and you must register the case within 14 days. Workers’ claims of up to AED 100,000 are exempt from court fees (Art. 55). For larger claims, see our overview of court fees and the cost of litigation in Dubai.

The two-year limit

Decree-Law 9/2024 bars a claim two years after the employment ends, although some older guidance still gives one year. If your employer misses the 14-day deadline, put your request in writing and file with MOHRE well before the two years run out. Keep your contract and renewals, payslips showing your basic wage, your resignation or termination letter and the final settlement statement.

DIFC and ADGM

The Dubai International Financial Centre and Abu Dhabi Global Market have their own employment laws.

DIFC

Under DIFC Employment Law No. 2 of 2019, employer contributions to the DIFC Employee Workplace Savings (DEWS) plan, or another qualifying scheme, replace gratuity: 5.83% of monthly basic wage for employees with less than five years’ service and 8.33% from five years. Service before the scheme still earns gratuity at 21 and 30 days a year, capped at twice the annual wage and calculated on a basic wage of at least 50% of annual wage and a 365-day year.

Payment is due within 14 days of the contract ending. If more than a week’s wage is left unpaid, the employer can owe a penalty of one day’s wage for each day of delay, although the court waives it while a dispute over the amount is before it (Art. 19). The DIFC law sets a six-month limit for claims (Art. 10). See our guide to the DIFC Small Claims Tribunal.

ADGM

Section 61 of the ADGM Employment Regulations 2024 gives 21 days’ basic wage a year for the first five years and 30 days after that, whatever the reason for leaving. It uses a 365-day year and a basic wage of at least 50% of wages, sets no cap and lets the employer deduct amounts you owe. Payment is due within 21 calendar days of termination.

Frequently asked questions

Do I lose my gratuity if I resign?
No. Article 51 has no reduction for resignation. If you had an unlimited contract made before February 2022, check how Article 68(3) applies to you.

Is gratuity calculated on my total salary?
No. It uses your last basic wage, without housing, transport or similar allowances.

How long do I have to claim unpaid gratuity?
In the mainland, two years from the end of your employment. In the DIFC the limit is six months.

If your gratuity is late, lower than you expected or reduced by deductions you do not recognise, contact our team. Our labour lawyers in Dubai can review your contract and final settlement statement and advise on your next step.

This article reflects UAE law as at September 2026. It is general information, not legal advice.