UAE Labour Law Gratuity 2026
Last updated: February 2026
Overview
Under UAE Labour Law (Federal Decree-Law No. 33 of 2021), employees are entitled to end of service gratuity upon termination of their employment contract, provided they have completed at least one year of continuous service.
Legal Basis
The gratuity provisions are outlined in UAE Federal Labour Law, Articles 51-54, covering eligibility, calculation methods, and payment terms.
Who is Entitled to Gratuity?
- Employees who have completed at least 1 year of continuous service
- Both UAE nationals and expatriates
- Employees on unlimited and limited contracts
- Full-time and part-time employees (pro-rated)
Gratuity Calculation Rates (2026)
Unlimited Contracts
- 1-5 years: 21 days of basic salary per year
- Beyond 5 years: 30 days of basic salary per year
Limited Contracts
- All years: 21 days of basic salary per year of service
Maximum Gratuity
The total gratuity amount is capped at a maximum of 2 years' worth of basic salary, regardless of the total years of service.
Gratuity Reductions
Employee Resignation (Unlimited Contract)
| Service Period | Gratuity Entitlement |
|---|---|
| Less than 1 year | No gratuity |
| 1-3 years | No gratuity |
| 3-5 years | One-third of gratuity |
| 5+ years | Full gratuity |
When Gratuity is Forfeited
An employee may lose their gratuity if terminated for:
- Assault on employer or colleagues
- Breach of trust or dishonesty
- Intoxication at work
- Absence without valid reason for more than 20 consecutive days or 2 months intermittently
- Disclosure of trade secrets
Payment Timeline
Employers must pay gratuity within 14 days from the end date of employment. Delays may result in penalties for the employer.
Gratuity Calculation Base
- Calculated on last drawn basic salary
- Does not include allowances (housing, transport, etc.)
- Does not include bonuses or overtime
- Company benefits not included
Employee Rights
- Right to request gratuity calculation in writing
- Right to file complaint if gratuity not paid
- Can approach Ministry of Human Resources and Emiratisation (MOHRE)
- Legal action within 1 year of employment end
Use Our Calculator
Calculate your exact gratuity entitlement with our UAE Gratuity Calculator.
Disclaimer: This guide is for informational purposes only. For specific legal advice regarding your employment situation, consult with a qualified legal professional or contact MOHRE.