Estimated Gratuity Entitlement
AED 37,800
Total eligible service4.50 yrs
Daily basic wageAED 400
Tier 1: Years 1–5 (21 days/yr)AED 37,800
Tier 2: After 5 yrs (30 days/yr)AED 0
Statutory maximum capAED 288,000
Based on basic salary; allowances excluded.
How UAE End of Service Gratuity Works
1. What salary components are included in the gratuity calculation?
Under Article 51 of Federal Decree-Law No. 33 of 2021, gratuity is strictly calculated on the employee’s basic salary only. Allowances such as housing, transport, utilities, mobile, and performance bonuses are excluded from the calculation.
2. Does an employee qualify for gratuity if they resign before 1 year?
No. Employees who have completed less than one continuous year of service are not entitled to end-of-service gratuity under UAE law. Once an employee completes one full year, gratuity is calculated on a pro-rata basis for partial years.
3. Is there a distinction between resignation and termination under the new law?
Under the current UAE Labour Law, the previous reduction penalties for resignation under limited/unlimited contracts have been abolished. Full gratuity is payable upon completion of service, provided the employee completed at least 1 year.
4. What is the statutory cap on gratuity payouts?
Article 51 explicitly caps the total end-of-service gratuity at an amount equal to two years' basic salary (24 months of the last basic wage).
Need outsourced payroll or audit-ready accruals? TruAccountants provides WPS-compliant payroll management, gratuity provisioning, and monthly IFRS workpapers from AED 1,500/month.
Book a consultation with our finance team.
