End-of-service gratuity is one of the most important entitlements under the UAE Labour Law, and one of the most common sources of dispute. Here is how it works for full-time employees in the private sector under the federal labour law.
Who is entitled
A full-time employee who has completed at least one year of continuous service is entitled to gratuity when the employment ends.
The formula
- 21 days of basic wage for each of the first five years of service;
- 30 days of basic wage for each year of service beyond five;
- a proportionate amount for part of a year, once the first year is completed;
- subject to a cap: total gratuity cannot exceed two years' wage.
The calculation uses your last basic wage — not the total package. Allowances such as housing or transport are generally excluded unless your contract says otherwise.
What can affect the amount
- Unpaid periods of absence may not count towards service.
- Amounts you owe the employer may be deducted.
- Part-time work and some free-zone or government arrangements have their own rules.
- Some employers offer alternative savings schemes approved by the authorities.
When it must be paid
The employer must pay all the employee's dues, including gratuity, within the period the law sets after the employment ends.
How to claim
- Ask the employer in writing for a final settlement showing how gratuity was calculated.
- If it is not paid or is wrong, file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE).
- If the dispute is not settled there, it is referred to the labour court.
- Do not delay — labour claims are subject to a time limit.
An advocate can check the calculation against your contract and payslips, and pursue the claim through MOHRE and the court if needed.