For many expats, gratuity is the largest single payment of their working life in the Gulf. It funds a move home, a new business or a child's education. That is why getting the number right, every time, builds so much trust.
Definition: Gratuity is a lump-sum payment an employee receives when their employment ends, as a reward for their years of service. In the UAE private sector, staff qualify after one year of continuous service. They earn 21 days of basic salary for each of the first five years and 30 days for each year after that.
An employee leaves after seven years on a monthly basic salary of AED 10,000. Using the common method of basic salary divided by 30, the daily wage is about AED 333. The first five years earn 105 days, about AED 35,000. The next two years earn 60 days, about AED 20,000. Total gratuity: roughly AED 55,000.
| Last basic salary | Service | Calculation | Gratuity |
|---|---|---|---|
| AED 6,000 | 3 years | 63 days (3 × 21) × AED 200 | AED 12,600 |
| AED 10,000 | 5 years | 105 days (5 × 21) × AED 333.33 | AED 35,000 |
| AED 10,000 | 7 years | 165 days (105 + 2 × 30) × AED 333.33 | AED 55,000 |
| AED 12,000 | 10 years | 255 days (105 + 5 × 30) × AED 400 | AED 102,000 |
| Any salary | Under 1 year | No entitlement | AED 0 |
Daily wage uses the common method of last basic salary divided by 30. Part years count pro rata after the first full year, unpaid leave days are excluded from service, and the total is capped at two years' wages.
Gratuity is the core payment. End of service benefits is the wider term. It can also include unused leave, notice pay and a repatriation ticket, all settled in the final settlement.
Last updated: November 2026 | Reviewed by Tuscan Consulting, Dubai