End-of-Service Gratuity Calculator
Calculate end-of-service gratuity under UAE Labour Law (Federal Decree-Law No. 33 of 2021). Enter your basic salary, years of service, and reason for termination.
UAE Gratuity Law — Federal Decree-Law No. 33 of 2021
The UAE's Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (effective February 2, 2022) governs end-of-service gratuity for private sector employees. Gratuity is calculated based on the employee's basic salary, length of service, and reason for termination:
| Years of Service | Gratuity Rate | Employer Termination | Employee Resignation |
|---|---|---|---|
| Less than 1 year | None | No entitlement | No entitlement |
| 1 to 3 years | 21 days/year | Full gratuity | No entitlement |
| 3 to 5 years | 21 days/year | Full gratuity | 1/3 of gratuity |
| 5+ years (first 5) | 21 days/year | Full gratuity | Full gratuity |
| 5+ years (additional) | 30 days/year | Full gratuity | Full gratuity |
Employees must complete at least 1 year of continuous service with the same employer to qualify for end-of-service gratuity.
The total gratuity amount cannot exceed the equivalent of 2 years’ total remuneration, regardless of the length of service.
Federal Decree-Law No. 33 of 2021 applies to all employment contracts entered into from February 2, 2022. Existing contracts were required to comply within one year.
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Frequently Asked Questions
About end-of-service gratuity in the UAE
Under Federal Decree-Law No. 33 of 2021, an employee must complete at least one full year of continuous service to be eligible for end-of-service gratuity. Days of absence without pay are not included in the calculation of the service period.
The daily salary for gratuity calculation is determined by dividing the employee’s monthly basic salary by 30, regardless of the actual number of days in the month. Only the basic salary is used — allowances such as housing, transport, and bonuses are not included unless the employment contract specifies otherwise.
The total end-of-service gratuity cannot exceed the equivalent of two years’ total remuneration (24 months of salary). If the calculated gratuity exceeds this cap, the employee receives the capped amount instead.
Yes, employees working in most UAE free zones (such as DIFC, ADGM, JAFZA, and others) are entitled to end-of-service gratuity. However, some free zones like DIFC have their own employment laws with slightly different gratuity calculations. Always check the specific free zone regulations that apply to your employment.
No. The UAE does not impose personal income tax, so end-of-service gratuity payments are not subject to tax. Employees receive the full calculated gratuity amount without any tax deductions.
The UAE introduced an alternative end-of-service savings scheme (Ministerial Decree No. 668 of 2023) as a voluntary option for employers. Under this scheme, employers can contribute to an investment fund managed by approved financial institutions instead of paying a lump-sum gratuity at termination. Employees may benefit from investment returns in addition to the guaranteed base contribution. The traditional gratuity system remains the default.
