Every employee leaving a job in the UAE asks the same question: How much gratuity will I get?
The answer depends on just two things — your basic salary and how long you worked. This guide gives you the exact formula, real examples, and everything MoHRE requires in 2026.
Quick Gratuity Formula
Years 1-5: (Basic Salary ÷ 30) × 21 × Years Worked
After 5 Years: Add (Basic Salary ÷ 30) × 30 × Extra Years
Cap: Maximum 2 years' basic salary
That's it. Let's break it down.
The 3 Rules You Need to Know
Rule 1: Only Basic Salary Counts
Your gratuity is calculated on basic salary only — not your total package.
Included: Basic salary
Excluded: Housing allowance, Transport allowance, Bonuses, Commissions, Overtime
Example: Total salary AED 15,000 with AED 9,000 basic = Gratuity calculated on AED 9,000
Rule 2: Minimum 1 Year Required
No gratuity if you leave before completing 12 months. This applies whether you resign or get terminated.
Rule 3: Full Gratuity for Everyone
Under the 2022 labour law update, resignation and termination get the same gratuity. The old rules that reduced payment for early resignation are gone.
Gratuity Calculation Examples
AED 5,000 Basic Salary
- 2 years: (5,000÷30) × 21 × 2 = AED 7,000
- 5 years: (5,000÷30) × 21 × 5 = AED 17,500
- 7 years: 17,500 + (5,000÷30) × 30 × 2 = AED 27,500
AED 10,000 Basic Salary
- 3 years: (10,000÷30) × 21 × 3 = AED 21,000
- 5 years: (10,000÷30) × 21 × 5 = AED 35,000
- 10 years: 35,000 + (10,000÷30) × 30 × 5 = AED 85,000
AED 20,000 Basic Salary
- 4 years: (20,000÷30) × 21 × 4 = AED 56,000
- 6 years: 70,000 + (20,000÷30) × 30 × 1 = AED 90,000
- 12 years: Would be 210,000 but capped at AED 480,000 (2 years' salary)
When You Won't Get Full Gratuity
Gross Misconduct (Article 44)
If terminated for serious violations, your employer can apply to court to withhold gratuity:
- Theft or fraud
- Forged documents
- Assault at workplace
- Deliberate damage to company property
- Disclosing confidential information
- Absent 7+ days without reason
Important: Under the new law, gratuity isn't automatically forfeited. The employer must get a court ruling.
Less Than 1 Year Service
Zero gratuity. No exceptions.
Unpaid Leave
Days without pay are excluded from your service period calculation.
Payment Timeline
Your employer must pay within 14 days of your last working day.
If they don't:
- File complaint at mohre.gov.ae or call 600590000
- MoHRE decides claims under AED 50,000 directly
- Court handles larger disputes
Under 2024 amendments, employers face fines up to AED 1,000,000 for non-payment.
Part-Time Employees
Gratuity is calculated proportionally:
Formula: Full-time gratuity × (Your weekly hours ÷ 48)
Example:
- Basic salary: AED 6,000
- Years: 3
- Hours: 24/week (half-time)
Calculation:
- Full-time gratuity = (6,000÷30) × 21 × 3 = AED 12,600
- Part-time gratuity = 12,600 × (24÷48) = AED 6,300
New Savings Scheme (Optional)
Since 2024, employers can opt into a savings scheme instead of traditional gratuity:
- Under 5 years: 5.83% of basic salary monthly
- Over 5 years: 8.33% of basic salary monthly
Money goes into an investment fund. You may get more (or less) than traditional gratuity depending on returns.
Check with your HR if your company uses this scheme.
Free Zone Employees
DIFC and ADGM have separate rules. Standard UAE gratuity may not apply.
Other free zones (JAFZA, DAFZA, etc.) generally follow federal law — but verify your contract.
Common Mistakes
❌ Using gross salary instead of basic salary
❌ Expecting gratuity before completing 1 year
❌ Thinking resignation reduces gratuity (old rule, no longer applies)
❌ Not counting partial years (you get pro-rata for months worked beyond full years)
Documents for Your Final Settlement
Keep these ready:
- Emirates ID
- Employment contract
- Resignation/termination letter
- Last 6 months' salary slips
Calculate Gratuity with RadixHR
Manual calculations lead to errors. RadixHR automates gratuity for UAE companies:
- Calculates based on current MoHRE rules
- Tracks service periods automatically
- Generates final settlement documents
- WPS compliant payroll
Related Resources
- UAE Labor Law 2026: Complete Guide
- Notice Period UAE 2026: Complete Guide
- Probation Period UAE 2026: Rules Every Employer Must Know
- Employment Contracts UAE 2026: Complete Guide
- UAE WPS Compliance Guide 2026
Free Calculators
- All UAE HR Tools & Calculators - Browse every free calculator in one place
- Gratuity Calculator - Calculate end of service benefits
- Leave Salary Calculator - Calculate leave pay
- Annual Leave Calculator - Check your leave entitlement
- Overtime Calculator - Calculate overtime pay
Based on Federal Decree-Law No. 33 of 2021 and amendments through 2024. For disputes, consult a UAE labour lawyer.
