UAE Labour Law Gratuity: The Rules and a 2-Year Example

UAE labour law gratuity, for a full-time foreign worker, is 21 days of basic wage for each of the first five years, then 30 days a year, after one continuous year. Unpaid absence is left out. The total cannot pass two years of wage. Two full years is 42 days of the last basic wage. I am an AI specialist in Dubai, not a lawyer. This is not legal advice, and CVPage AI is not a MOHRE service.

Article 51 of Federal Decree-Law No. 33 of 2021 says a foreign full-time worker who has completed one or more years of continuous service is entitled to end-of-service gratuity on the basic wage: 21 days for each year of the first five years, and 30 days for each year after that.

Sources we used: UAE legislation: Federal Decree-Law No. 33 of 2021, English text

What do the UAE gratuity rules actually say?

The statute people mean by UAE gratuity law is Federal Decree-Law No. 33 of 2021. It came into force on 2 February 2022. Article 73 repeals Federal Law No. 8 of 1980. Article 51 is the gratuity clause for full-time workers. I read the English text on the UAE legislation site on 16 October 2026.

The government portal restates the same band. A worker with less than one year gets no gratuity. More than one year and less than five years is 21 days of salary for each year. After five years, the years that follow the first five are 30 days each. In all cases the total shall not exceed the wage of two years. Days of unpaid absence are not included in the service period. The portal also says the worker is entitled to gratuity for fractions of a year once that first year is complete, and that the days are calculated on the last basic salary, not on housing, transport, utilities, or furniture. I read that page on 16 October 2026.

• Full-time foreign worker, one continuous year or more: gratuity is due when the service ends.
• First five years: 21 days of basic wage for each year.
• Each year after five: 30 days of basic wage.
• A part of a year, after the first year is complete, is a matching fraction of that year's days.
• Unpaid days of absence come off the service period before you apply the one-year test.
• The whole benefit stops at two years of wage.
• The employer may deduct amounts the worker owes, on the conditions in the executive regulation.
• Wages and other entitlements, including gratuity, are due within 14 days from the end of the contract.

How do you calculate gratuity in the UAE for 2 years?

Two years sits entirely inside the 21-day band, because five years have not been reached. Two times 21 is 42 days of the last basic wage. There is no second rate to blend in. If the basic wage is AED 3,650, one day on this site is 3,650 times 12 divided by 365, which is AED 120. Forty-two times 120 is AED 5,040. That basic wage is the same figure the calculator uses so you can multiply by hand. It is an illustration, not your payslip.

The one-year test comes first. End the job one day short of a year, after unpaid leave is removed, and the gratuity line is zero. Two years clears that test. A leap day inside the dates adds a day of service. It does not add a whole extra year. Unpaid leave days are subtracted before you decide whether the year is complete.

A slice past two years stays on 21 days until the fifth year ends. Two years and 183 days is 2 plus 183/365, all of it at 21 days. Five years and 183 days is five years at 21 days plus 183/365 of a year at 30 days. The split follows years of service, not the calendar year you resign in. The last basic wage is the one in the contract at the end, not an average of earlier years.

Type your own basic wage, start date, last day, and unpaid leave into the UAE gratuity calculator

Does resignation cut the gratuity?

Article 51, in the English text I read, does not reduce the sum because the worker resigned. It does not set the old one-third or two-thirds cuts. The portal's calculation section describes full gratuity in each band and does not mention those fractions. JAFZA's 11 September 2022 note on the new law says no reductions apply where an employee resigns, and that a summary dismissal no longer removes the benefit. If someone quotes one third or two thirds, ask which law they are using. Federal Law No. 8 of 1980 is the repealed one.

A contract that started before 2 February 2022 can still have a slice that someone argues under the previous statute. Article 73 says older resolutions and rules stay in force only where they do not conflict with the new decree, until they are replaced. This page does not split your history into two laws. The calculator applies Article 51 to the dates you type. If the start date is before that day, ask the employer which period they are using before you treat a lower fraction as required.

Who is outside these gratuity rules?

Article 3 applies the decree to establishments, employers, and workers in the private sector. It then excludes employees of federal and local government agencies, members of the armed forces, police, and security, and domestic workers. Article 51 sends a national worker to the pensions and social security legislation, not to the 21-day and 30-day lines. The portal says the same for Emiratis in the private sector.

Part-time and other patterns are not the full-time sum. Article 52 leaves that mechanism to the executive regulation. The portal cites Article 30 of Cabinet Resolution No. 1 of 2022: working hours in the contract per year, divided by working hours in a full-time contract per year, times 100, is the percentage, and that percentage is applied to the full-time benefit. The same page says gratuity does not apply to temporary employment if the duration is less than one year. The calculator on this site is the full-time version.

The portal's free-zone page, updated 12 August 2026, says people working in free zones are generally not governed by the UAE Labour Law, that each authority has its own employment rules, and that the contract must still be in accordance with the Labour Law. JAFZA and DDA publish their own pages. Read those before you assume Article 51 is the only text. DIFC and ADGM are financial free zones with their own employment rules. If the contract names one of them, do not use this total.

What those two zones' own pages say, and what they do not say, is in JAFZA and DDA gratuity notes

What does the two-year cap mean?

Article 51 says the total end-of-service gratuity does not exceed two years' wage. Article 1 defines wage more widely than basic wage: basic wage plus cash allowances and benefits in kind that the contract or the decree provides. The portal calculates the days on basic salary and then says the total shall not exceed the wage of two years. Two years of service, at 42 days, is far under that ceiling. You would need a long run of 30-day years before the cap binds. When it does, the figure stops. It does not keep growing.

The day rate is a separate argument. Article 51 does not print a divisor. This site uses monthly basic times 12, divided by 365. A payroll that divides the month by 30 will not match these fils. Federal Decree-Law No. 47 of 2021 is a different statute. MOHRE's 13 December 2021 briefing says it sets general labour rules for federal-government staff under the human resources law and for private-sector workers under the law regulating labour relations. JAFZA's rules also name it. An English PDF of Decree 47 hosted by Khalifa University, which that PDF labels as not a government translation, sets the same 21 and 30 days as a minimum in its Article 11, and says a year has 365 days and a month has 30 days. I have not compared that English copy with the Arabic gazette. The calculator does not switch to a 30-day month.

What happens if the employer joined the savings scheme?

The same portal page describes a voluntary alternative. It applies to employers and employees in the private sector and free zones. After an employee is enrolled, the employer stops the traditional gratuity for that employee and must calculate and settle gratuity earned before enrolment. The basic subscription the portal states for a full-time employee is 5.83 percent of monthly basic salary when service is under five years, and 8.33 percent after that. Returns on the fund are not something this page can know. Set the last day to the day before enrolment if you want the traditional slice only, and take the fund balance from the provider.

Where should you check a number before you rely on it?

• Read Article 51, not a blog that still quotes the repealed one-third cuts.
• Use the last basic wage, and keep allowances out of the 21 days and the 30 days.
• Remove unpaid leave before you test the first year.
• If the contract is JAFZA, DDA, DIFC, ADGM, or a government body, open that authority's rules.
• If a savings scheme enrolment date exists, stop the traditional count the day before it.
• Expect payment within 14 days of the contract ending, then ask MOHRE if it does not arrive.

Unused leave, notice pay, and unpaid salary are separate lines on the final settlement calculator

Extra hours are a different sum from gratuity. The rates are in how overtime is calculated in the UAE

The last working day still depends on the notice in the contract. That count is in the notice-period guide