Statutory end-of-service gratuity on your basic salary.
Gratuity due
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Daily wage
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Eligible days of pay
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Worked example
Take an employee leaving after 6 years of continuous service with a last-drawn monthly basic salary of AED 12,000. The daily wage is the basic divided by 30, which is AED 400. For the first 5 years you earn 21 days of basic pay a year, giving 105 days. For the sixth year you earn 30 days, so the total is 135 days. Multiplying 135 days by the AED 400 daily wage gives a gratuity of AED 54,000. Only the basic salary counts, so housing and other allowances are excluded. The total can never exceed two years of total wage, but this example is well under that cap.
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How it is calculated
Under the 2021 Labour Law, end-of-service gratuity is based on your last drawn basic salary, with allowances excluded. The daily wage is the monthly basic divided by 30. You earn 21 days of that daily wage for each of the first five years of service and 30 days for each year after that, with partial years pro-rated. You need at least one full year of continuous service to qualify, so anything below a year earns nothing. The total is capped at two years of your wage. Under the current law gratuity is no longer reduced for resignation, so a resigning employee receives the full amount.