Work out what a leaver is owed before the final salary run. Enter the last basic salary and the two dates, and the calculator applies Article 51 of the labour law.
Based on Federal Decree-Law 33 of 2021, Articles 51 and 53.
Enter the service details
Your gratuity total appears here.
Full-time contracts under the federal labour law. It is an estimate for planning a final settlement, not legal advice. Confirm the final figure with MOHRE or a qualified adviser.
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The rule
How gratuity is worked out
Gratuity runs on the last basic wage, not the total package. Allowances for housing, transport or phone stay out of it.
Under Article 51 of Federal Decree-Law 33 of 2021, a full-time foreign employee who has finished one or more years of continuous service earns 21 days of basic pay for each of the first five years, then 30 days for each year after that. Part years count in proportion once that first year is complete.
Two details change the total. Days of unpaid absence do not count towards service, and the whole gratuity cannot pass two years' wage. Anything the employee owes by law or by a court judgment can be deducted.
The money is not optional or late: Article 53 gives the employer 14 days from the end of the contract to pay the final wage and every other entitlement.
That deadline is why the figure is worth checking the week the notice lands, not on the last day.
The maths
The formula in one line
Daily basic wage = last basic monthly salary divided by 30. Gratuity = daily basic wage multiplied by 21 days for each of the first five years, plus 30 days for each later year.
Example: a basic salary of AED 8,000 with 6 years of service. The daily basic wage is AED 266.67. The first five years give 105 days and the sixth gives 30 days, so 135 days in total, which is AED 36,000.
Run this for every leaver, not one at a time
Tipsoi holds the joining date, the unpaid leave and the last basic salary, so the final settlement is ready with the payroll run.
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Examples
Worked examples
Every figure below comes from the calculator on this page, so you can type the same numbers in and check them.
A. Under one year, so nothing is due
An employee resigns after 8 months on a basic salary of AED 6,000. Article 51 starts the entitlement at one full year of continuous service, so the gratuity is zero. The final salary and any unused leave are still payable.
B. Three years, inside the 21 day band
An employee leaves after 3 years on a basic salary of AED 8,000. The daily basic wage is AED 266.67 and the service earns 63.1 days of pay, which is AED 16,815.34.
C. Eight years with unpaid leave, so both bands apply
An employee leaves after 8 years on a basic salary of AED 12,000 and took 20 days of unpaid leave. Those days come out of the service period first. The first five years earn 105 days, the remaining 2.95 years earn 88.5 days, so 193.5 days at AED 400 a day is AED 77,408.22.
| Case | Service counted | Days of basic pay | Gratuity |
|---|---|---|---|
| A. Resigns after 8 months, basic AED 6,000 | 258 days, 0.71 years | 0 | AED 0.00 |
| B. Leaves after 3 years, basic AED 8,000 | 1,096 days, 3.00 years | 63.1 | AED 16,815.34 |
| C. Leaves after 8 years with 20 unpaid days, basic AED 12,000 | 2,902 days, 7.95 years | 193.5 | AED 77,408.22 |
Edge cases
Common cases
| Situation | What the law says |
|---|---|
| Under one year of service | No gratuity. Article 51 starts the entitlement at one year of continuous service. |
| One to five years | 21 days of basic pay for each year, and part years in proportion. |
| More than five years | 21 days a year for the first five, then 30 days for each year after that. |
| Resignation | Article 51 sets one calculation for the end of service. It does not reduce the amount because the employee resigned. |
| Unpaid leave | Those days are left out of the service period, so a long unpaid break lowers the total. |
| Very long service | The total is capped at two years' wage. |
| Money owed to the employer | Amounts due by law or by a judgment can be deducted from the gratuity. |
Questions
Common questions
Is gratuity based on basic salary or total salary?
Basic salary. Article 51 calculates the gratuity on the last basic wage, so allowances are excluded.
Does resigning cut the gratuity?
No. Article 51 gives one calculation for the end of service and makes no reduction for resignation. The old 1980 law did, which is why the question still comes up.
When must gratuity be paid?
Within 14 days of the contract ending, together with the final wage and any other entitlement, under Article 53.
Do unpaid leave days count towards service?
No. Days of absence without pay are excluded from the service period used in the calculation.
Is there a maximum gratuity?
Yes. The total cannot pass two years' wage, which usually only matters after about 24 years of service.
Does this cover DIFC and ADGM?
No. Both financial free zones run their own employment laws, so check the contract and the free zone rules.
Keep reading
Need this for every leaver, with the service dates already in the system? Tipsoi keeps attendance, leave and payroll on one record.
Last updated September 2026. Sources: Federal Decree-Law 33 of 2021, Articles 51 and 53.