Calculate your end of service benefits, annual leave encashment and final settlement under UAE Labour Law (MOHRE rules).
✅ Last verified: July 2026 — Based on UAE Labour Law (Federal Decree-Law No. 33 of 2021)
⚡ Quick Answer
On a AED 8,000 basic salary after 5 years, your gratuity is approximately AED 28,000 (21 days × 5 years × AED 266.67 daily). After 10 years, it jumps to approximately AED 68,000 (5 years × 21 days + 5 years × 30 days). Total gratuity is capped at 24 months basic salary (AED 192,000 for this example).
Under the UAE Labour Law (Federal Decree-Law No. 33 of 2021), employees who complete at least one year of continuous service are entitled to end of service gratuity (EOSB). The calculation is based on basic salary only — allowances for housing, transport or food are not included. For the first 5 years: 21 calendar days' basic salary per year. For years beyond 5: 30 calendar days' basic salary per year. The daily wage is calculated as monthly basic salary ÷ 30.
Total gratuity is capped at 2 years (24 months) of basic salary, regardless of how long you have worked. Under the new 2022 law, resignation no longer automatically reduces gratuity entitlement — employees who resign after 1+ years typically receive full gratuity. The employer must pay the final settlement within 14 days of the last working day.
Example: AED 8,000 Basic Salary, 10 Years, 15 Days Unused Leave
Daily wage = AED 8,000 ÷ 30 = AED 266.67. First 5 years: 21 × 5 × 266.67 = AED 28,000. Years 6-10: 30 × 5 × 266.67 = AED 40,000. Total gratuity = AED 68,000. Leave encashment: 15 × 266.67 = AED 4,000. Total settlement = approximately AED 72,000. Use our UAE Corporate Tax Calculator if you run a business in the UAE.
UAE Gratuity FAQs 2026
How is UAE gratuity calculated?
21 days basic salary per year for the first 5 years, then 30 days per year beyond 5 years. Daily wage = monthly basic salary ÷ 30. Total capped at 24 months basic salary.
What is the gratuity for 5 years on AED 8,000 salary?
21 days × 5 years × AED 266.67 daily = AED 28,000. This is the full entitlement for employer termination or resignation after 1+ years under the new law.
Do I get gratuity if I resign in UAE?
Yes. Under the new UAE Labour Law (post-Feb 2022), employees who resign after 1+ years receive full gratuity. The old reduced-gratuity-on-resignation rule no longer applies for contracts under the new law.
What is included in UAE final settlement?
Gratuity (EOSB), unpaid salary, unused annual leave encashment, repatriation flight, and other contractual entitlements. Must be paid within 14 days of the last working day.
How many annual leave days am I entitled to in UAE?
30 calendar days per year (2.5 days/month) for employees with 1+ year of service. Unused days are paid out at your daily basic wage rate in the final settlement.
Is gratuity taxable in UAE?
No. UAE has no personal income tax, so gratuity is received tax-free. However, if you're a tax resident of another country, it may be taxable there.
What is the maximum UAE gratuity?
Capped at 2 years (24 months) basic salary regardless of service length. For AED 8,000 basic, the maximum gratuity is AED 192,000.
Sources & References: UAE Federal Decree-Law No. 33 of 2021 on Regulation of Labour Relations. MOHRE (mohre.gov.ae) — End of service benefits and annual leave. Last verified July 2026.
💡 UAE Gratuity & Settlement Tips
Only Basic Salary Counts
Gratuity is calculated on basic salary only — not housing, transport, or food allowances. Make sure you use only your basic monthly salary in the calculator.
Minimum 1 Year Required
You must complete at least 1 year of continuous service to be entitled to gratuity. If you leave before 1 year, you receive no gratuity.
Cap at 24 Months Basic
Total gratuity is capped at 2 years of basic salary regardless of how long you work. After ~24 years on AED 8,000, the cap of AED 192,000 is reached.
New Law = Full Gratuity on Resignation
Under the 2022 law, resigning after 1+ years gives full gratuity. The old rule that reduced gratuity for resignations under 5 years no longer applies for new contracts.
14-Day Settlement Deadline
Your employer must pay the full final settlement within 14 days of your last working day. If they delay, you can file a complaint with MOHRE.
Use Leave Before Leaving
Unused annual leave is encashed at your daily basic rate in the final settlement. But taking leave before your last day may be more valuable if you have higher total compensation than basic alone.