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What is the gratuity formula in the UAE for private-sector workers?

Asked by Anonymous·Jun 26, 2026·1 answers
Someone wants the exact formula they can plug their numbers into to estimate end-of-service pay.

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
The UAE gratuity formula, set out in the UAE Labour Law (Federal Decree-Law No. 33 of 2021) and administered by MOHRE, works off your basic monthly wage only. Step one: find your daily basic wage by dividing your monthly basic salary by 30. Step two: for each of the first five years of continuous service, multiply that daily rate by 21. Step three: for every completed year beyond five years, multiply the daily rate by 30. Step four: add a pro-rated amount for any partial final year. Add the figures together for your total gratuity, which by law cannot exceed two years' wages. Only basic salary feeds the formula — housing, transport and other allowances are excluded, which is the most common reason people overestimate. A minimum of one full year of service is required to be eligible at all. MOHRE publishes an official online calculator that applies this formula. If the result you are offered seems wrong, you can raise it with MOHRE or compare verified UAE employment lawyers on LEXAI.
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