End of Service Gratuity in the UAE: How to Calculate What You Are Owed
A 2026 guide to UAE end-of-service gratuity and final settlement — covering the exact calculation formula, service year thresholds, resignation vs. termination rules, and what changed under Federal Decree-Law No. 33 of 2021.
Your settlement is one half of the job-loss picture — the other is unemployment insurance: check your ILOE eligibility and estimated compensation.
Quick answers
How do I calculate final settlement in the UAE?
Add together unpaid wages, pay for unused annual leave, end-of-service benefits and any notice period allowance owed, then subtract deductions the law allows. The law requires the employer to pay wages and all other entitlements at the end of the contract. Source
How is end-of-service gratuity calculated in a full and final settlement?
A full-time foreign worker with one year or more of continuous service receives 21 days of basic wage for each of the first five years and 30 days for each year after that, with part-years counted in proportion. It is based on the last basic wage, unpaid days of absence are not counted, and the total cannot exceed two years’ wage. Source
Is final settlement different for termination and resignation?
Article 51 sets one end-of-service formula and does not apply a different rate according to who ended the contract. What changes is the notice element: the party that does not observe the notice period pays the other a notice period allowance equal to the wage for the full notice period or the part not served. Source
How is unused annual leave paid in the final settlement?
A worker who leaves before using accrued leave is paid for those days, including a proportionate amount for part of a year. The law states this is calculated on the basic wage. Source
How is notice pay calculated under UAE labour law?
The notice period is the one agreed in the contract, which must be between 30 and 90 days, and the worker is entitled to full wage during it. The notice period allowance is calculated on the last wage received. Source
When must the final settlement be paid?
The employer must pay the worker’s wages and all other entitlements within 14 days from the end date of the contract. Claims under the law are not heard after two years from the end of the employment relationship. Source
Free tool · Federal Decree-Law No. 33 of 2021
UAE Final Settlement Calculator: Gratuity, Leave & Notice Pay
As of August 2026, UAE end-of-service gratuity is 21 days of basic wage per year for the first five years of service and 30 days per year after that, capped at two years’ wage, with no reduction for resignation (Federal Decree-Law No. 33 of 2021, Article 51). Unused annual leave is paid on basic wage and notice compensation on full wage. Formula and scope rechecked 14 October 2026 against MoHRE and UAE Government guidance.
Most online calculators stop at gratuity. Your final settlement has more in it: end-of-service gratuity (Art. 51), leave encashment for unused annual leave, paid on basic wage (Art. 29), notice pay at full wage (Art. 43) and any pending salary. Under the current law your gratuity is not reduced if you resign — the old unlimited-contract reductions were abolished in 2022. Everything below runs in your browser: nothing is sent or stored.
The tool estimates gratuity, leave encashment, notice pay and pending salary for a full-time foreign worker under the federal private-sector law; verify each input and any special regime. More free Labeeb tools. Scope: UAE mainland private sector. DIFC and ADGM run their own end-of-service systems (DEWS) and are not covered. If your employer is enrolled in the voluntary Savings Scheme (Cabinet Resolution 96/2023), contributions replace gratuity accrual for the enrolled period. The legal scope and article references are explained below.
Who this guide covers
Check the employment system before using the formula
The calculation above is an estimate for a full-time foreign employee under the UAE federal private-sector employment law, using a monthly basic wage. It is not a universal UAE entitlement calculator. UAE nationals are subject to pension and social-security rules; part-time and other work arrangements use the proportional method in the executive regulations. DIFC and ADGM have separate employment regimes. A worker enrolled in the voluntary alternative end-of-service Savings Scheme needs to separate benefits accrued before enrolment from contributions after enrolment.
Confirm the legal employer, work location, employment arrangement and scheme on your contract and with HR before relying on any online figure. The UAE Government’s end-of-service guide explains these distinctions.
The calculation
Calculate gratuity from basic wage and service
For a full-time foreign worker with at least one year of continuous service, Article 51 provides 21 days of the last basic wage for each of the first five years and 30 days for each additional year. After the first year, a fraction of a year is paid proportionately. Unpaid absence is excluded from service, and the benefit cannot exceed two years’ wage. The same Article 51 formula applies after resignation or employer termination; the notice and other settlement components may differ.
| Input | What to verify |
|---|---|
| Last basic wage | Use the basic component on your contract or payslip, rather than the total package with allowances. |
| Service dates | Check the first and last working dates and any unpaid absence. Contract renewal does not automatically reset continuous service. |
| First five years | 21 days of basic wage for each year. These years are not re-rated when service passes five years. |
| Later service | 30 days of basic wage for each year after year five; apply the statutory cap. |
For a simple full-year example, AED 8,000 monthly basic wage and six years of qualifying service gives (5 × 21 + 1 × 30) days at AED 8,000 / 30 per day: AED 36,000 estimated gratuity, before any fact-specific adjustment. The first five years remain at the 21-day rate. Check the current MoHRE-hosted consolidated law, Article 51.
Final settlement
Gratuity is only one line in the closing payment
Ask for an itemised statement. Depending on the facts, it may include unpaid wages, accrued but unused annual leave, gratuity, notice-period allowance and contractual dues. Allowable deductions or an amount owed for unserved notice can change the net payment. The wage basis is not identical for every line: the end-of-service benefit uses basic wage, while the law addresses leave and notice pay separately.
- Reconcile wages: compare the last paid date with the final working date and payslips.
- Check leave: confirm the approved leave balance and the wage basis used for payment.
- Check notice: compare the contract, who initiated the ending, what notice was served and any agreed waiver.
- Check gratuity: use the basic wage, continuous service and any scheme enrolment date.
- Check timing: Article 53 requires payment of wages and other entitlements within 14 days from the contract end date.
Keep your contract, payslips, leave record and written settlement statement. If the figures disagree, ask the employer for the calculation in writing and use MoHRE’s official service channels for a mainland private-sector labour complaint or clarification. Employees under another jurisdiction should use that jurisdiction’s process.
Common questions
Questions to resolve before you sign
Does resignation reduce the gratuity?
Article 51 does not set a lower gratuity rate just because the worker resigned. Old advice about one-third or two-thirds under the former unlimited-contract system should not be applied to this federal-law calculation. The one-year qualifying rule and other case-specific facts still matter.
Does every UAE worker use this calculator?
No. It estimates a federal private-sector, full-time foreign worker’s settlement. UAE national pension rules, part-time arrangements, DIFC, ADGM and Savings Scheme enrolment need their own rules or adjustments.
What if the employer’s figure is different?
Request a written breakdown identifying the basic wage, service period, unpaid absence, leave balance, notice treatment and any deductions. Resolve the facts first; an online calculator is indicative and cannot decide a disputed entitlement.
Sources and scope: Federal Decree-Law No. 33 of 2021, as amended; UAE Government end-of-service guide; Savings Scheme regulation. Rechecked 14 October 2026. This guide is general information, not a legal determination.
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