Your UAE gratuity is built from basic salary only: 21 days' pay per year for your first 5 years, then 30 days' pay per year after that, capped at 2 years' basic salary. On a basic salary of AED 12,000/month, that's AED 41,425 at 5 years and AED 100,603 at 10 years, more than double, since the accrual rate itself steps up. And since February 2022, resignation and termination pay exactly the same amount.
Years 1-5
21 days/yr
basic pay per year
Year 6+
30 days/yr
rate steps up
Cap
2 years' basic
total ceiling
Resignation
Same as termination
since Feb 2022
Basic salary only, not your total package. Housing and transport allowances don't count.
Gratuity due today
AED 53,260
Same for resignation or termination
Current accrual rate
30 days/yr
Year 6+ rate
2-year cap
AED 288,000
Not reached yet
Gratuity at each milestone
| 1 yr | 2 yrs | 5 yrs | 10 yrs | 15 yrs | 20 yrs |
|---|---|---|---|---|---|
| AED 8,285 | AED 16,570 | AED 41,425 | AED 100,603 | AED 159,781 | AED 218,959 |
If your offer letter quotes one bundled "package" figure rather than a separate basic salary line, don't enter it here directly, it will overstate your gratuity. Split it first with the basic vs package split calculator.
Estimates based on Federal Decree-Law No. 33 of 2021, Article 51. Always confirm your exact figure with MOHRE guidance or your HR/payroll team before relying on it for a resignation or settlement negotiation.
Only know your total package, not your basic salary? Split it first.
Open the split calculatorGratuity isn't a flat percentage of pay, it's a daily-wage figure (your basic annual salary divided by 365) multiplied by 21 for each of your first 5 years of service, then multiplied by 30 for each year after that. The two rates don't blend retroactively: your first 5 years always accrue at 21 days, and only the years beyond that accrue at the higher 30-day rate. There's no back-dating the 30-day rate onto years you've already worked.
It's calculated on basic salary only, the fixed portion of your pay before housing allowance, transport allowance, and any other benefits. Since most UAE offer letters quote one bundled package figure, this is the single most common place people overestimate their gratuity, entering their full package instead of their actual basic salary.
Federal Decree-Law No. 33 of 2021, in force since 2 February 2022, made two changes that this calculator takes seriously rather than glossing over. First, it abolished the limited/unlimited contract distinction: every private-sector contract is now fixed-term, with employers required to convert any remaining unlimited contracts by 1 February 2023. Second, and more consequentially for anyone weighing whether to resign, it repealed the old rule that cut gratuity for employees who resigned from an unlimited contract before 5 years' service. Today, resignation and employer-initiated termination pay the exact same gratuity, provided you've completed at least 1 year of continuous service.
Total gratuity is capped at 2 years' basic salary, however long you stay with one employer. In practice this cap rarely binds for realistic salary-and-tenure combinations, it mainly matters at very long tenures (25 years or more) relative to a fairly low basic salary.
Current law (2022+) vs the repealed pre-2022 resignation rule, for context only
| Line item | Current law | Old rule (repealed) |
|---|---|---|
| Termination | AED 53,260 | AED 53,260 |
| Resignation | AED 53,260 | AED 53,260 |
| Gap from resigning | AED 0 | -AED 0 |
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Gratuity is built from your basic salary only: 21 days' basic pay for each of your first 5 years of service, then 30 days' basic pay for each year after that, capped at 2 years' basic salary in total. It's governed by Article 51 of Federal Decree-Law No. 33 of 2021 (the current UAE Labour Law), and it's paid as a lump sum when you leave, not deducted from your monthly pay.
No, not since 2 February 2022. Federal Decree-Law No. 33 of 2021 repealed the old resignation-reduction rule entirely. Today, resignation and employer-initiated termination receive an identical gratuity award, provided you've completed at least 1 year of continuous service. If anyone tells you resignation cuts your gratuity to a third or two-thirds, they're describing a rule that no longer exists.
Under the previous Federal Law No. 8 of 1980, an employee on an unlimited (open-ended) contract who resigned before completing 5 years had their gratuity cut: one-third of the full award for 1-3 years' service, two-thirds for 3-5 years, and the full award only from 5 years onward. That reduction, and the unlimited/limited contract distinction it depended on, were both abolished by the 2021 Labour Law. It still circulates as advice because a lot of older content, and some HR teams, haven't caught up. This calculator shows the repealed figure alongside the correct one specifically so you can spot the difference if someone quotes you the old number.
No. The 2021 Labour Law abolished the limited/unlimited contract distinction altogether. Every private-sector employment contract in the UAE is now a fixed-term contract, and employers who were still running unlimited contracts were required to convert them to fixed-term by 1 February 2023. There's no live "unlimited contract" case left to calculate gratuity differently for.
Basic salary only. Housing allowance, transport allowance, bonuses, and other benefits are all excluded, even though they might make up a large share of your quoted package. Many UAE offers bundle basic salary, housing, and transport into one headline number, commonly 60-80% of that number is actually basic salary, so check your offer letter or payslip for the real split before running this calculator. Our basic vs package split calculator can help you estimate it if you only have the bundled figure.
Yes. Article 51 requires at least 1 full year of continuous service before any gratuity is due, for either resignation or termination. Leave before completing that first year and you're not entitled to gratuity at all, no partial payout.
Yes, total gratuity can never exceed 2 years' basic salary, however long you serve one employer. For most realistic salary-and-tenure combinations the cap doesn't bind, at 20 years of service you're typically still well under it, it mainly matters for very long tenures (25+ years) relative to a fairly low basic salary.
Not always. This calculator models the standard MOHRE mainland formula. Some DIFC and ADGM free zone employers instead run DEWS (the DIFC Employee Workplace Savings scheme) or an equivalent employer-funded savings plan instead of standard gratuity. Check your offer letter and free zone before relying on this calculator's figures if you work in DIFC or ADGM.
Related UAE tools and reading
Gratuity is one piece of your total UAE picture. These tools cover the rest.
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