UAE End-of-Service Gratuity Calculator (Updated for 2026)

The formula is simple. The edge cases are not.

End-of-service gratuity under Article 51 of Federal Decree-Law No. 33 of 2021 comes down to two numbers: 21 days of basic salary per year for the first five years of service, 30 days per year after that. An employee needs at least one year of continuous service to qualify, and the total is capped at two years' worth of basic salary.

Worked example — an employee on AED 8,000 basic salary leaving after 7 years:

• Daily basic: 8,000 ÷ 30 = AED 266.67
• First five years: 266.67 × 21 days × 5 = AED 28,000
• Years six and seven: 266.67 × 30 days × 2 = AED 16,000
• Total gratuity: AED 44,000

The five mistakes that still show up in 2026

• Docking gratuity for resignation. Dead since the 2022 labour law took effect. Under the old law, resigning early could reduce the entitlement; under Federal Decree-Law No. 33 of 2021, resignation and termination pay the same full gratuity. Payroll sheets still applying the old reduction are creating disputes MOHRE will not side with.
• Counting unpaid leave. Days of unpaid leave are excluded from the service period. For long unpaid stretches, this visibly moves the number.
• Ignoring the cap. Total gratuity cannot exceed 24 months of basic salary. It only bites for very long service, but for a 25-year employee it is the difference between the formula and the law.
• Missing the 14-day clock. All end-of-service settlements — gratuity included — are due within 14 days of the contract ending. Late settlement is a compliance issue, not a courtesy issue.
• Forgetting the savings-scheme alternative. Employers enrolled in the voluntary end-of-service savings scheme fund monthly contributions instead of the final lump sum. If you have opted in for some staff categories, the formula above no longer describes their entitlement — the fund balance does.

Skip the spreadsheet formula

Our free UAE Gratuity Calculator handles the split at five years, the unpaid-leave adjustment, and the cap — enter the basic salary, the dates, and read the number. No signup, and it reflects the current rules, not the pre-2022 ones half the templates floating around still encode.

For employers: gratuity is a balance, not an event

Every month, every employee's accrued gratuity grows. A 60-person company on average salaries is typically carrying a six-figure end-of-service liability that finance only "discovers" one resignation at a time. Proziyo tracks the accrual across the workforce alongside the visas, contracts, and documents it already watches — one more line on the compliance dashboard instead of a year-end surprise. See how in-house teams run it, or check the wider obligations in our MOHRE compliance checklist.