UAE Gratuity Calculator: Federal Decree-Law No. 33/2021 Unified Formula
Direct Legal Rule: Under UAE Federal Decree-Law No. 33/2021 (Article 51), gratuity is calculated on last drawn basic salary: 21 calendar days per year for the first 5 years, and 30 days per year thereafter. Resignation and termination receive identical 100% treatment once 1 continuous year is completed, subject to a 2-year salary maximum cap.
UAE Employment Parameters
Compliant with UAE Ministry of Human Resources and Emiratisation (MOHRE).
Excludes housing & transport
AED
2,000 AED25,000 AED50,000+ AED
Years
0 to 11 months
Statutory Gratuity
AED0.00
Federal Decree-Law No. 33/2021 Standard
Daily Basic Wage (Salary / 30):0.00 AED
Years 1–5 Accrual (21 days/yr):0.00 AED
Year 6+ Accrual (30 days/yr):0.00 AED
Gross Uncapped Entitlement:0.00 AED
Statutory Maximum Cap (2 Years):0.00 AED
Statutory Mathematical Formula & Computation Mechanics
Effective February 2, 2022, Federal Decree-Law No. 33 of 2021 entirely replaced the previous 1980 Labour Law (Federal Law No. 8 of 1980). One of the most monumental reforms was the complete harmonization of end-of-service gratuity calculations across all contract types.
Abolishment of the Historical Resignation Penalty
Under the repealed 1980 law, employees who resigned under an unlimited contract suffered severe statutory deductions (receiving only 1/3 for 1–3 years or 2/3 for 3–5 years).
Under Article 51 of Decree-Law No. 33/2021, these penalty tiers have been totally eliminated. Whether an employee resigns or is terminated by the employer, their gratuity entitlement is 100% identical, provided they have completed at least one continuous year of service.
UAE Statutory Gratuity Formula (Article 51)
Daily Basic Wage = Monthly Basic Salary / 30
Years 1 to 5: Accrual = Daily Wage × 21 × Service Years (Max 5)
Years 6 Onwards: Accrual = Daily Wage × 30 × (Total Service Years - 5)
Statutory Maximum Cap = 24 × Monthly Basic Salary
Service Duration
Statutory Days Accrued
Payable on 12,000 AED Basic Salary
1 Completed Year
21 Days
8,400 AED
3 Completed Years
63 Days
25,200 AED
5 Completed Years
105 Days
42,000 AED
7 Completed Years
165 Days (105 + 60)
66,000 AED
10 Completed Years
255 Days (105 + 150)
102,000 AED
Real-World Scenario Walkthroughs
Scenario 1: Resignation at 3 Years
Marketing Manager Resigning After 3 Years
Basic Salary: 15,000 AED Daily Wage: 15,000 / 30 = 500 AED Accrual: 3 yrs × 21 days × 500 AED = 31,500 AED.
Under current UAE law, the full 31,500 AED is paid with zero reduction.
Can an employer in UAE deduct visa costs from final gratuity?
Under UAE Federal Decree-Law No. 33/2021 Article 6, employers are strictly prohibited from charging or deducting visa, recruitment, or residency processing costs from employee compensation or end-of-service gratuity settlements under any contractual pretext.
Does an employee receive gratuity if they resign before completing one year in UAE?
Under Article 51 of Federal Decree-Law No. 33/2021, workers who complete less than one continuous year of service are not entitled to end-of-service gratuity, regardless of whether separation occurs via resignation or employer termination.
Are housing and transport allowances included in UAE gratuity calculations?
Under Article 51 Clause 2, gratuity calculation is strictly based upon the employee's last drawn basic wage. Variable allowances including fixed housing, utility subsidies, and transport stipends are excluded from the statutory severance base.
What is the statutory deadline for employers to pay final gratuity in UAE?
Under Article 53 of Federal Decree-Law No. 33/2021, employers must disburse all accrued remuneration, untaken annual leave balance, and statutory gratuity entitlements within fourteen (14) calendar days from the official contract termination date.
How does the optional UAE workplace savings scheme replace cash gratuity?
Under Cabinet Resolution No. 96/2023, employers enrolled in approved alternative savings funds contribute monthly basic pay percentages (5.83% for first 5 years, 8.33% thereafter), exempting the enterprise from traditional defined-benefit lump-sum gratuity liabilities upon departure.
Related GCC Financial Utilities
Saudi Arabia
Saudi End of Service Calculator
Calculate severance and voluntary resignation deductions under Articles 84 and 85 of Royal Decree M/51.