How much end-of-service gratuity (مكافأة نهاية الخدمة) do you owe a UAE employee? Under Federal Law 33/2021: 21 days of basic salary per year for the first 5 years + 30 days per year after, capped at 2 years of basic salary total. Uses LAST basic salary excluding allowances (housing, transport, etc.). Below are the exact formulas + 5 worked examples for different tenures. AttendUX automates all this in payroll.
Built around how MENA teams actually manage this day-to-day.
21 days of basic salary per year of service for the first 5 years. 30 days of basic salary per year for every year after the 5th. Both pro-rated for partial years (e.g., 2.5 years = 2.5 × 21 days).
UAE EoS calculation uses LAST basic salary — housing allowance, transport allowance, education allowance, and other regular allowances are EXCLUDED. This is distinct from Saudi (which includes housing + allowances in the base).
Maximum total gratuity: 2 years of basic salary regardless of tenure. So a 25-year employee earning AED 20K basic maxes at AED 480,000 EoS — even though simple formula would give more.
Pre-2022, resigning employees in unlimited contracts had reductions (1/3, 2/3, full based on tenure). Federal Law 33/2021 (effective Feb 2022) REMOVED these — resigning and terminated employees now get the same calculation.
The 2022 reform also unified contracts. No more unlimited contracts. All new contracts are limited (fixed-term), typically 2-year renewable. Historical unlimited-contract employees have transition clauses.
If employee is terminated for gross misconduct per Article 44 of Federal Law 33/2021 (theft, physical assault, drunkenness at work, revealing employer secrets, etc.), no EoS is payable. Rare but worth noting.
Daily rate = 8,000 ÷ 30 = AED 266.67. Formula: 21 days × 2 yrs = 42 days. Gratuity = 42 × 266.67 = AED 11,200.
Daily rate = 12,000 ÷ 30 = AED 400. Formula: 21 days × 5 yrs = 105 days. Gratuity = 105 × 400 = AED 42,000.
Daily rate = 15,000 ÷ 30 = AED 500. Formula: (21 × 5) + (30 × 5) = 105 + 150 = 255 days. Gratuity = 255 × 500 = AED 127,500. Under 2-year cap (2 × 12 × 15,000 = 360,000). Final: AED 127,500.
Daily rate = 10,000 ÷ 30 = AED 333.33. Formula: (21 × 5) + (30 × 10) = 105 + 300 = 405 days = 13.5 months. Gratuity would be 405 × 333.33 = AED 135,000. Under 2-year cap (240,000). Final: AED 135,000.
Daily rate = 30,000 ÷ 30 = AED 1,000. Simple formula: (21 × 5) + (30 × 20) = 105 + 600 = 705 days = AED 705,000. BUT 2-year cap = 2 × 12 × 30,000 = AED 720,000 — so under cap. Final: AED 705,000. (If basic were AED 40K, cap would kick in.)
Per Federal Law 33/2021: 21 days of basic salary per year of service for the first 5 years, plus 30 days of basic salary per year for every year after the 5th. Maximum cap: 2 years of basic salary. Uses LAST basic salary (excludes housing, transport, education, and other allowances). Partial years are pro-rated.
Yes, since the 2022 reform (Federal Law 33/2021 effective February 2022). Pre-2022, resigning employees in unlimited contracts had reductions. The reform removed these — resigning and terminated employees now get identical calculation. Only exception: termination for gross misconduct per Article 44 (no gratuity payable).
No. UAE gratuity uses basic salary ONLY — housing, transport, education, and other allowances are excluded. This is distinct from Saudi Arabia (which includes housing + regular allowances in the base). Always document basic salary separately in employment contract to avoid disputes.
Maximum total gratuity is capped at 2 years of basic salary, regardless of how long the employee served. So an employee with 25+ years of service earning AED 40K basic would hit the cap at AED 960K (2 × 12 × 40K) rather than earning the simple-formula result of ~AED 1.4M for that tenure.
Yes. Federal Law 33/2021 formula is pre-configured in AttendUX payroll engine — tenure calculated from hire date, basic salary tracked separately from allowances, cap applied automatically, 2022 reform rules (no resignation reduction) applied. At termination, EoS auto-computes + appears in exit settlement + flows to final payslip. Labor-inspection audit trail immutable.
This page summarizes key provisions of UAE Federal Decree-Law No. 33 of 2021 (end-of-service provisions) for general informational purposes only. This is not legal advice. Labor laws are amended periodically; AttendUX makes no warranty about completeness or current validity. For your specific situation — including employment terminations, disputes, cross-border cases, or policy design — consult a labor-law attorney licensed in the relevant jurisdiction and verify with the UAE MOHRE.
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