If you work in the UAE private sector, part of what you earn is not paid out month by month. It builds up quietly in the background and lands in your final settlement when you leave. That is your gratuity, officially called the end-of-service benefit. This guide explains what it means on a UAE payslip, who qualifies, how the amount is worked out and what to do if it is not paid.

Short on time? Enter your basic salary and dates in our UAE gratuity calculator for an instant estimate.

Last updated: September 2026. This page was rewritten to reflect the current UAE Labour Law. An earlier version mixed in rules from another country’s gratuity system; those have been removed.

What Does Gratuity Mean in a UAE Salary?

Gratuity is a lump sum your employer must pay when your contract ends, as a reward for continuous service. It is set by Federal Decree-Law No. 33 of 2021 (the UAE Labour Law) and its implementing rules in Cabinet Resolution No. 1 of 2022. You can read the government summary on the UAE Government portal.

It is not a deduction from your salary and it is not a bonus your manager can choose to skip. It is a legal entitlement that the employer funds on top of your pay. Some companies show it as a cost in your package, which is why it sometimes appears in offer letters. We cover that in more detail in is gratuity part of CTC?

Who Is Entitled to Gratuity?

• Private-sector employees who have completed at least one year of continuous service with the same employer.
• Both full-time and part-time staff. Part-timers receive a share based on their contracted hours compared with a full-time role.
• Employees who resign and employees whose contract is ended by the employer. Since February 2022, resigning no longer reduces the amount.

A few groups follow different rules:

• UAE and GCC nationals are usually covered by pension schemes (such as GPSSA) instead of gratuity.
• DIFC and ADGM employees fall under those free zones’ own employment laws and savings schemes.
• Domestic workers (maids, nannies, drivers) are covered by a separate law. See our housemaid gratuity guide.
• Federal and local government staff follow their own HR and pension rules.

How Gratuity Is Calculated

The calculation uses your last basic wage only. Housing, transport and other allowances are not included.

• First five years: 21 days of basic wage for each year of service.
• Every year after the fifth: 30 days of basic wage per year.
• Part years: paid pro rata once you have passed the one-year mark.
• Unpaid absence: days off without pay are not counted as service.
• Cap: the total cannot go above two years of wages.

Daily wage = Basic salary ÷ 30
Gratuity = Daily wage × gratuity days

Worked example

Say your basic salary is AED 6,000 and you leave after 7 years.

• Daily wage: 6,000 ÷ 30 = AED 200
• First 5 years: 5 × 21 = 105 days
• Years 6 and 7: 2 × 30 = 60 days
• Total: 165 days × AED 200 = AED 33,000

For more scenarios, including two-year and five-year examples, see how to calculate gratuity in the UAE. If you are unsure what counts as basic pay on your contract, this basic salary guide helps.

Is Gratuity Taxed in the UAE?

No. The UAE does not charge personal income tax on salaries or end-of-service payments. What you are owed is what you should receive, less any lawful deductions such as documented loans or advances.

When Must It Be Paid?

Your employer has to settle gratuity, along with any unpaid salary and leave encashment, within 14 days of the contract ending. Some employers now pay into an approved end-of-service savings scheme instead of holding the money themselves, which is allowed under a 2023 Cabinet decision. Either way, the entitlement stays yours. There is more on how companies set this money aside in why gratuity is a monthly liability.

What If Your Employer Does Not Pay?

1. Ask HR in writing for your final settlement statement. You can use our gratuity application format.
2. If nothing is paid after 14 days, file a labour complaint with MOHRE through its app, website or call centre (600590000).
3. MOHRE will try to settle the matter. If it cannot, the case is referred to the labour court.

Our step-by-step guide to filing a complaint for delayed gratuity covers the documents you will need.

Frequently Asked Questions

How long do I need to work to get gratuity?

One year of continuous service with the same employer. Before that, no gratuity is due.

Do I lose gratuity if I resign?

No. Under the current law, resignation and termination are treated the same for gratuity once you pass one year.

Can my employer refuse to pay gratuity?

Not simply by choice. Even a dismissal without notice under Article 44 does not automatically cancel gratuity already earned. An employer can only deduct amounts the law permits or a court approves.

Are allowances included?

No. Only the basic wage is used, so a low basic salary with large allowances means a smaller gratuity.

Final Thoughts

Keep a copy of your contract and your latest payslip, note your exact start date, and check the numbers before you sign your final settlement. A few minutes with the gratuity calculator can save you from accepting less than you are owed.

This guide is general information, not legal advice. For a disputed amount, contact MOHRE or a licensed UAE lawyer.