Does resignation reduce gratuity under the current UAE Labour Law?

The current Article 51 formula does not apply the former one-third and two-thirds resignation reductions. Those tiers belonged to the repealed 1980 law and are shown only in clearly labelled legacy modes.

Is gratuity payable for less than one year of service?

No. A foreign full-time worker must complete at least one year of continuous eligible service before statutory gratuity is due.

What is the maximum UAE gratuity?

The statutory gratuity is capped at two years of wage. This calculator applies the cap as 24 months of the basic monthly salary used for the gratuity calculation.

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Q: Is UAE gratuity based on basic salary or total salary?

For a foreign full-time private-sector worker under Article 51, gratuity is calculated from the last basic wage, excluding allowances such as housing and transport.

Q: What happens at exactly five years?

The first five years are calculated at 21 days of basic wage per year. Service beyond five years is calculated at 30 days per additional year, including eligible fractions.

Estimate private-sector end-of-service gratuity from your basic salary and exact service period. See every tier, legacy adjustment, and the statutory cap.

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Methodology and legal basis

Current law first, legacy only when selected

For foreign full-time workers in the UAE private sector, Article 51 of Federal Decree-Law No. 33 of 2021 provides 21 days of last basic wage for each of the first five years, 30 days for each year after five, proportional payment for eligible fractions after one completed year, exclusion of unpaid absence, and a two-year wage cap. The official UAE Government gratuity guidance confirms the same calculation and that allowances are excluded.

Step 1: eligible service

The date mode treats the end date as the last working day, counts full calendar anniversaries, prorates the remaining service year, and removes entered unpaid days.

Step 2: basic-wage tiers

Daily basic wage is monthly basic salary divided by 30. The first five years earn 21 days per year; only service beyond five earns 30 days per year.

Step 3: adjustment and cap

Current law applies the full base regardless of resignation or termination. A legacy selection can apply former resignation tiers, then the 24-month basic-wage cap is checked.

Important scope: this is an informational estimate for foreign, full-time, MoHRE-regulated private-sector workers under the traditional gratuity system. It does not calculate pension benefits for UAE nationals, the optional Savings Scheme, part-time formulas, domestic-worker rules, DIFC or ADGM rules, contractual enhancements, debts or court-ordered deductions. For legacy exits, the calculator applies former Articles 132, 137, 138 and 139 from the repealed Federal Law No. 8 of 1980. It is not legal advice.

Questions people ask

UAE gratuity FAQ

Is UAE gratuity based on basic salary or total salary?

For the Article 51 calculation, use the last basic wage. Housing, transport, utilities, furniture, and other allowances are excluded.

Does resignation reduce gratuity under current law?

No resignation fraction appears in current Article 51. The one-third and two-thirds tiers came from former Article 137 and are available only when you deliberately select a legacy unlimited-contract exit.

Is gratuity payable below one year?

No statutory gratuity is due before one completed year of continuous eligible service.

What happens at exactly five years?

Exactly five eligible years are all in the 21-day tier. The 30-day tier begins only for service beyond five years.

Can the estimate differ from the final settlement?

Yes. Unpaid leave records, contractual benefits, savings-scheme enrolment, outstanding debts, court decisions, and the regulator governing the employer can change the actual amount.

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