Skip to main content

Ask a Lawyer·Labour / Employment

Labour / EmploymentAnswered

Does my housing or transport allowance count toward gratuity in the UAE?

Asked by Anonymous·Jun 26, 2026·1 answers
An employee with a salary split into basic plus allowances wants to know if those allowances increase their gratuity.

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

1 answers

Best answer
L
LEXAI

Editorially reviewed by LEXAI

Jun 26, 2026
No. Housing, transport, and other allowances do not count toward your end-of-service gratuity in the UAE. The UAE Labour Law (Federal Decree-Law No. 33 of 2021), administered by MOHRE, calculates gratuity strictly on your basic wage, and allowances of any kind — housing, transport, utilities, telephone, or general cost-of-living supplements — are excluded from the figure. This is why two employees with the same total package can receive very different gratuities: the one with a higher basic-salary component gets more. To estimate your gratuity, find the basic-wage line in your contract and apply the formula of 21 days' basic wage per year for the first five years and 30 days per year thereafter, capped at two years' wages. Some packages are structured with a deliberately low basic salary, which reduces end-of-service liability; if you believe your basic wage was set artificially low to shrink your benefits, that can be questioned. You can raise concerns with MOHRE or compare verified UAE employment lawyers on LEXAI to review how your salary is structured.
Helpful (0)

Facing something similar?

Describe your own situation below. Your details go to our team, and a verified UAE lawyer may receive them so they can contact you about it.

Pick your situation so your enquiry can reach a verified UAE lawyer who works in that area.

Your details stay private and are used only to handle your enquiry. A verified UAE lawyer may receive them so they can contact you about it. Privacy policy

Related Questions

Underlying law

Keep reading

Labour Employment

UAE Work Permit: Types, Eligibility, and How MOHRE Issues One (2026)

Working in the UAE without a valid MOHRE work permit is illegal for both the worker and the employer. This guide sets out the 13 permit categories, the conditions MOHRE checks, the offer-letter-to-contract sequence, the fee bands, and what cancellation does.

5 min read

Labour Employment

UAE Maximum Pension Salary: Contribution Limits and Deductions Explained

The UAE calculates pension on a capped contribution salary, not on total pay. This guide explains the floor and the ceiling, what counts toward the contribution salary, how employer and employee shares split, and why expatriate staff receive end-of-service gratuity instead of a pension.

5 min read

Labour Employment

Warning Letter UAE Labour Law: Rules, the Penalty Ladder and Your Rights

A written warning is a formal disciplinary penalty under UAE labour law, not an informal telling-off. Learn what a valid warning must contain, which sanctions an employer may impose and in what order, how many warnings can precede dismissal, and how to contest one.

5 min read