End of Service Gratuity in Dubai: Complete Calculation Guide
Understand your rights, calculate your payout, and maximize your exit package before leaving Dubai.
How Gratuity is Calculated
End-of-service gratuity is one of the most valuable aspects of UAE employment. Understanding exactly what you’re owed ensures you leave Dubai with your full entitlement. The calculation depends on your contract type, years of service, and reason for leaving.
| Service Duration | Daily Rate | Resignation Entitlement | Termination Entitlement |
|---|---|---|---|
| 0-1 year | — | 0% | 0% |
| 1-3 years | 21 days/year | 1/3 of full amount | Full 21 days/year |
| 3-5 years | 21 days/year | 2/3 of full amount | Full 21 days/year |
| 5+ years | 30 days/year | Full amount | Full 30 days/year |
Gratuity Maximization Tips
Timing Your Exit
If you’re at 4.5 years, waiting to reach 5 years significantly increases your payout (from 21 to 30 days/year rate, plus full vs 2/3 for resignation).
Basic Salary Definition
Gratuity is calculated on BASIC salary only — not housing allowance, transport, or other benefits. If your package is heavily loaded in allowances, negotiate higher basic before leaving.
Documentation
Keep all salary certificates, contract amendments, and pay slips. Disputes over basic salary amount are common. Documentation protects your claim.
Legal Recourse
If your employer doesn’t pay within 14 days of last working day, file a complaint with MOHRE. The process is straightforward and typically resolved in your favor.
Example Calculations
Scenario: Resignation after 7 years, AED 20,000 basic salary
First 5 years: 21 days × 5 = 105 days. Next 2 years: 30 days × 2 = 60 days. Total: 165 days. Daily rate: 20,000 ÷ 30 = AED 667. Gratuity: 165 × 667 = AED 110,000 ($30,000). Since resignation after 5+ years = full entitlement.