How much gratuity do you get when your job ends?

Gratuity is a lump sum your employer pays when your job ends, worked out from your last basic pay and your years of service. It applies to expatriates working full time in the private sector.¹²

Do you qualify for gratuity?

You qualify once you have completed one year or more of continuous service with the same employer.¹ Below one year you get nothing.²

Days of absence without pay do not count towards your service.¹ If you took 20 days of unpaid leave, your service is 20 days shorter.

Emiratis do not get Labour Law gratuity. An Emirati’s end of service benefit comes from the pension law.¹ See end of service for Emiratis.

Check the start date on your contract or labour card, and count any unpaid leave you took.

How is your gratuity calculated?

On your basic pay only, at a number of days’ pay for each year:

• 21 days’ basic pay for each of the first five years.
• 30 days’ basic pay for each year after the fifth.¹

The law treats a month as 30 days and a year as 365 days, so one day’s basic pay is your monthly basic pay divided by 30.¹

Each row is days of pay multiplied by AED 333.33, which is AED 10,000 divided by 30.

Work out your own figure with the gratuity calculator.

What counts as your basic pay?

The basic wage in your employment contract. It does not include allowances or benefits in kind.¹ The UAE Government lists housing, transport, utilities and furniture allowances as excluded.²

Gratuity is worked out on the last basic wage you received. If you are paid by the piece, the law uses your average daily wage instead.¹

Find the basic salary line in your contract or your offer letter. That is the figure your employer will use.

Do you get gratuity for part of a year?

Yes, once you have completed one full year. The law pays a share for parts of a year in proportion to the time worked.¹

For example, 3 years and 6 months on AED 10,000 basic pay is 3.5 years × 21 days = 73.5 days’ pay, or AED 24,500.

Is there a maximum?

Yes. Your total gratuity cannot be more than two years’ wage.¹ On basic pay of AED 10,000 a month, two years of basic pay is AED 240,000, which the formula reaches at 25 and a half years of service.

The cap uses the word “wage”, which the law defines as basic pay plus allowances, while the gratuity itself is worked out on basic pay.¹ The examples here and the calculator cap at two years of basic pay, the lower figure. If your gratuity reaches the cap, ask MOHRE which figure applies to you.

When must your employer pay you?

Within 14 days of the date your contract ends, together with your wages and every other amount due under the law, your contract or company rules.¹ What else is due is set out in your final settlement.

Can your employer take money off your gratuity?

Yes, but only amounts due by law or under a court judgment.¹ The Executive Regulations list them:

• loans, or pay you received above your entitlement
• your share of pension or insurance contributions due under UAE law
• fines for violations under the company’s penalty list approved by the Ministry of Human Resources and Emiratisation (MOHRE)
• debts under a court judgment against you
• the cost of damage caused by your mistake or by breaking the employer’s instructions.³

For fines and damage, the employer has to follow the procedures in the law, and the amount must not be more than three months overdue unless you agreed otherwise.³

Ask your employer for a written breakdown of every deduction before you sign a final settlement.

Who is not covered by Labour Law gratuity?

• Employees of federal and local government.
• Members of the armed forces, police and security services.
• Domestic workers.¹ The domestic workers law leaves the end of service rules for domestic workers to the Cabinet.⁴
• Staff in the DIFC and ADGM financial free zones, which have their own employment laws. See DEWS in DIFC and ADGM workplace savings.
• Years in which your employer paid into the end of service savings scheme for you instead.²

If your gratuity is late, short or refused, you can complain to MOHRE. A claim under the Labour Law is not heard more than two years after your work ends.¹