Under the standard UAE private-sector approach, eligible employees receive gratuity based on basic salary and completed service. The first five years and later years use different day rates, subject to the applicable law and employment arrangement.
The standard formula
The usual calculation is 21 days of basic salary for each of the first five years and 30 days for each additional year. An eligible part-year is calculated proportionately after the minimum service condition is met.
Basic salary matters
Housing, transport and other allowances are generally not part of the statutory basic-salary calculation. Confirm the basic salary shown in the contract and final payroll rather than using the total monthly package.
Service and deductions
Unpaid leave can affect qualifying service, while lawful amounts owed to the employer may be deducted from the final settlement. Part-time and alternative savings-scheme arrangements require their own calculation method.
Check the settlement
Review the gratuity separately from salary, leave and other contractual payments.
- Confirm service dates and unpaid leave.
- Check the final basic salary.
- Ask for the calculation by service band.
- Verify whether an alternative end-of-service scheme applies.
General information only. Confirm current rules with the relevant authority.