How is gratuity calculated for an unlimited contract in the UAE?

Unlimited contracts have been phased out in the UAE. Since the UAE Labour Law (Federal Decree-Law No. 33 of 2021) took effect, all private-sector employment is on fixed-term (limited) contracts, and existing unlimited contracts had to be converted, so the old unlimited-versus-limited distinction no longer changes how gratuity is calculated. Today, regardless of your original contract type, gratuity is based on your basic wage: 21 days' basic wage for each of the first five years of continuous service and 30 days' basic wage for each year beyond five, provided you have completed at least one year. The total is capped at two years' wages. Crucially, the reduced-gratuity penalty that used to apply when an employee resigned from an unlimited contract before five years has been abolished — resignation and termination now produce the same gratuity. Use your basic salary, not your full package, in the calculation. MOHRE offers an official online calculator. If you are unsure how your converted contract affects continuity of service, you can compare verified UAE employment lawyers on LEXAI.