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
The New UAE Labour Law: Federal Decree-Law No. 33 of 2021
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Under the repealed 1980 law, employees who resigned under an unlimited contract suffered severe statutory deductions (receiving only 1/3 for 1–3 years or 2/3 for 3–5 years).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
Two Practical UAE Scenarios
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.
When must the employer disburse terminal dues in the UAE?
Under Article 53 of Federal Decree-Law No. 33/2021, the employer must settle all employee entitlements (including gratuity and untaken leave balance) within fourteen (14) days from the employment contract termination date.
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.