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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 by LEXAI. 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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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.
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