UAE Gratuity Example: 3 Years of Service on an AED 8,000 Basic Salary

October 23, 2026

For anyone with 5 years of service or less, UAE gratuity uses only the 21-days-per-year rate — no need to think about the 30-day tier or the cap. Here's a full worked example at 3 years.

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The Numbers

Monthly basic salary: AED 8,000. Daily basic wage: 8,000 ÷ 30 = AED 266.67.

  • Gratuity per year of service: 21 × 266.67 = AED 5,600
  • 3 years of service: 3 × 5,600 = AED 16,800 total gratuity

Why This Stays Simple

Because the full 3 years fall inside the first 5-year band, every year is paid at the same 21-day rate — there's no need to split the calculation across two tiers, and the 2-year-wage cap is nowhere close to being reached (it would take roughly 70+ years at this salary to approach it, which is itself impossible, illustrating that the cap only matters at long tenures and/or high salaries, covered in a separate article on the cap).

Frequently Asked Questions

How is daily basic wage found?

Monthly basic salary divided by 30. For AED 8,000, that's AED 266.67 per day.

Does 3 years of service use the 21-day or 30-day rate?

The 21-day rate — the 30-day rate only applies to years of service beyond the fifth.

What is the total gratuity for 3 years at AED 8,000 basic?

AED 16,800 (21 days × AED 266.67 daily wage × 3 years).

Does the 2-year cap apply here?

No — at this salary and tenure the uncapped total is far below two years' wage (AED 192,000), so the cap has no effect.