Your end-of-service gratuity can look different depending on one fact: did you resign, or did your contract simply run its course and end? Many Dubai employees estimate the same figure either way, then get a shock in their final settlement. Under the current UAE Labour Law for most private-sector staff, the reason for leaving matters less than under older rules β but service length, contract type and timing still change the result. Use this walk-through to build an estimate, then confirm it on mohre.gov.ae.
Start with the three numbers every calculation needs
Almost every gratuity estimate rests on the same foundations. Get these right before you do any maths, because a wrong input is the most common source of a wrong total.
- Your final basic salary β not your full package. Housing, transport and other allowances typically do not count.
- Your exact service period β from your official start date to your last working day, usually excluding unpaid absence days.
- Your daily wage basis β gratuity is commonly worked out using a daily rate derived from basic salary, often by dividing monthly basic pay by around 30 days.
Check your contract and last payslip for the basic figure; in many packages basic salary is only a portion of total pay, which is why gratuity often feels smaller than expected. If your salary changed, it is typically the final basic salary that counts, not an average.
The usual accrual pattern
For eligible employees with at least a year of continuous service, gratuity typically accrues at around 21 days of basic pay for each of the first five years, and around 30 days of basic pay for each year after that, subject to an overall cap of roughly two years’ total pay. Less than a full final year is usually counted pro-rata once you qualify. Under a year of service, there is typically no gratuity entitlement.
A simple illustration helps. Imagine a basic salary of around AED 10,000 a month. The daily rate is roughly AED 333. After three full years, an estimate would be around 21 days multiplied by three, multiplied by that daily rate β roughly AED 21,000. After seven years, you would add the first five years at the lower rate and the next two at the higher rate. This is an example only, not a promise; your employer’s calculation and the official MOHRE calculator should be your cross-check.
If you resign
Resignation used to reduce gratuity sharply under older unlimited-contract rules, and many residents still quote those reductions. Under the current framework, where most contracts are fixed-term, a resigning employee who has completed qualifying service typically keeps gratuity on the same accrual basis, provided they serve proper notice and leave lawfully. Do not let an outdated blog post talk you out of money β or into expecting a penalty that no longer applies the same way.
Resigning still has traps. Leaving without serving notice, abandoning the job, or dismissal for specified misconduct can affect your settlement. Resigning during probation also changes things, and moving to a new employer from probation can trigger rules about recruitment costs in some cases. Put your resignation in writing, state your last day, and keep proof of delivery.
If your contract ends or your employer ends it
If a fixed-term contract reaches its end date and is not renewed, gratuity is typically calculated on the same service and basic-salary basis, with no reduction simply because the contract expired. The same broad approach usually applies if your employer terminates you without misconduct, alongside any separate entitlement such as notice pay or compensation for arbitrary dismissal where that applies β those are different lines, not part of gratuity itself.
Keep the lines separate: gratuity, unused annual leave, notice pay if due, and any ticket entitlement. A single lump sum with no breakdown is hard to check. Ask payroll for an itemised statement and compare it with your estimate and guidance on u.ae and mohre.gov.ae. Small differences often come from unpaid days; large ones deserve a polite written query, and MOHRE advice if needed.
Do the maths early, on your final basic salary and exact dates, and you will walk into your last week knowing roughly what should arrive β whether the decision to leave was yours or the contract simply reached its natural end.