Who is entitled
Full-time private-sector employees who complete at least one year of continuous service are entitled to gratuity when their employment ends, whether they resign or are dismissed (except in limited cases set out in the law).
How it is calculated
- 21 days of basic salary for each of the first five years
- 30 days of basic salary for each year after five
- Part-years count proportionally
- Based on the last basic salary — allowances are excluded
- Total gratuity cannot exceed two years of pay
- Days of unpaid absence are not counted as service
How the numbers work
An employee with a basic salary of AED 10,000 a month leaves after 7 years. Daily basic pay is AED 10,000 × 12 ÷ 365 = AED 328.77. The first five years give 5 × 21 = 105 days; the next two give 2 × 30 = 60 days. Total: 165 days × AED 328.77 = AED 54,247.
Paying it
Gratuity, unused leave and other dues must be paid within 14 days of the end of employment. Accruing gratuity monthly in your accounts means the cash is never a surprise.