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How is gratuity calculated after more than five years in the UAE?

Asked by Anonymous·Jun 26, 2026·1 answers
A long-tenured employee wants to know how the rate changes once they pass five years of service.

This answer is AI-generated and editorially reviewed. It is general legal information, not legal advice — verify anything you act on with a licensed UAE lawyer. How LEXAI uses AI

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LEXAI

Editorially reviewed by LEXAI

Jun 26, 2026
After five years of continuous service in the UAE private sector, the gratuity accrual rate increases. Under the UAE Labour Law (Federal Decree-Law No. 33 of 2021), administered by MOHRE, you earn 21 days' basic wage for each of the first five years, then 30 days' basic wage for every year beyond five. So for someone with eight years of service, the first five years accrue at 21 days each and the remaining three years at 30 days each, all calculated on basic wage and added together. The total is still capped at two years' total wages, which mainly affects very long-serving, higher-tenure staff. Only your basic salary feeds the formula — allowances are excluded — and unpaid leave days are not counted in the service period. The change from 21 to 30 days applies only to years served after the five-year point, not retroactively to the earlier years. MOHRE's official calculator applies the two-band split automatically. If your employer applies the lower 21-day rate to your post-five-year service, you can challenge it with MOHRE or compare verified UAE employment lawyers on LEXAI.
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