UAE gratuity worked examples: see the exact math
Written by Usama Afzal. Last updated: October 2026. Based on the UAE Labour Law; not legal advice.
Daily wage = basic salary ÷ 30. Multiply by 21 days for each of your first 5 years, and by 30 days for each year after that. The total can never exceed 2 years' salary. Below are 9 worked examples with the full calculation shown.
The formula, step by step
- Daily wage = last basic salary ÷ 30
- Years 1–5: daily wage × 21 × number of years
- Years 6+: daily wage × 30 × extra years
- Cap: total cannot exceed 24 months of basic salary
- Part-years count proportionally (e.g. 6 months = 0.5 year)
Only basic salary counts — housing, transport and other allowances are excluded. You need at least 1 year of continuous service to qualify.
Example set 1: AED 3,000 basic salary
Daily wage = 3,000 ÷ 30 = AED 100.
| Service | Calculation | Gratuity |
|---|---|---|
| 2 years | 100 × 21 × 2 | AED 4,200 |
| 4 years | 100 × 21 × 4 | AED 8,400 |
| 7 years | (100 × 21 × 5) + (100 × 30 × 2) = 10,500 + 6,000 | AED 16,500 |
Example set 2: AED 5,000 basic salary
Daily wage = 5,000 ÷ 30 = AED 166.67.
| Service | Calculation | Gratuity |
|---|---|---|
| 1 year | 166.67 × 21 × 1 | AED 3,500 |
| 5 years | 166.67 × 21 × 5 | AED 17,500 |
| 10 years | (166.67 × 21 × 5) + (166.67 × 30 × 5) = 17,500 + 25,000 | AED 42,500 |
Example set 3: AED 10,000 basic salary
Daily wage = 10,000 ÷ 30 = AED 333.33.
| Service | Calculation | Gratuity |
|---|---|---|
| 3 years | 333.33 × 21 × 3 | AED 21,000 |
| 8 years | (333.33 × 21 × 5) + (333.33 × 30 × 3) = 35,000 + 30,000 | AED 65,000 |
| 12 years | (333.33 × 21 × 5) + (333.33 × 30 × 7) = 35,000 + 70,000 | AED 105,000 |
When does the 2-year cap kick in?
The cap is 24 months of basic salary. For a AED 10,000 salary that means AED 240,000 — you would need roughly 30+ years of service to hit it, so most workers never reach the cap. It mainly affects very long-serving, high-salary employees.
What if you resign?
Since February 2022, resigning no longer reduces your gratuity in the UAE. You get the full amount calculated above, as long as you completed at least 1 year. Read our detailed guide: Full gratuity if you resign?
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