How UAE Gratuity Is Calculated: Article 51 Explained
October 23, 2026
Under Article 51 of Federal Decree-Law No. 33 of 2021 (the UAE Labour Law), a private-sector employee who completes at least one year of continuous service is entitled to end-of-service gratuity: 21 days' basic wage for each of the first five years, then 30 days' basic wage for each year after that, with the total capped at two years' wage.
Skip the math and get your answer instantly:
Open the UAE Gratuity Calculator →The Formula, Step by Step
Find the daily basic wage: monthly basic salary ÷ 30. Multiply by 21 for each full year up to year 5, and by 30 for each full year beyond year 5. Add the two parts together, then check the result against the cap.
- Years 1-5: Daily basic wage × 21 × number of years (up to 5)
- Years 6+: Daily basic wage × 30 × number of years beyond 5
- Cap: total gratuity cannot exceed 2 years' wage (24 × monthly basic salary)
What Counts as "Basic Wage"
Gratuity is calculated on basic salary only — the u.ae guidance is explicit that housing, transport, and other allowances are excluded from the base. A salary breakdown that bundles everything into one number will overstate the gratuity if used directly; only the basic salary line applies.
Frequently Asked Questions
What law sets the UAE gratuity formula?
Article 51 of Federal Decree-Law No. 33 of 2021, the current UAE Labour Law, as summarized on the official u.ae government portal.
Do allowances count toward gratuity?
No — only basic salary. Housing, transport, and other allowances are excluded from the calculation.
Is there a minimum service requirement?
Yes, at least one year of continuous service. Service under one year earns no gratuity.
Is there a maximum gratuity amount?
Yes — the total is capped at two years' wage (24 months of basic salary), regardless of how long someone has worked.