What is included in a UAE final settlement?

A final settlement is the gratuity plus everything else that falls due when employment ends. In practice it is unpaid salary to the last working day, payment for annual leave not taken (Article 29 of Cabinet Resolution No. 1 of 2022, on the basic wage), pay in lieu of notice where notice was not served (Article 43(4), on the full wage), the end-of-service gratuity under Article 51, and any repatriation cost the contract puts on the employer — less what the employee owes. Deductions from the wage are capped by Article 25 of the Decree-Law, and cannot exceed 50% in total. Everything is payable within 14 days of the end date (Article 53). What a settlement contains beyond this varies from one company to the next, so the settlement tab on this page is a worksheet you fill in, not a calculation.

Is gratuity calculated on basic salary or total salary?

Basic wage. Article 51(2) says the benefit is calculated according to the basic wage, and Article 1 defines basic wage as the contract wage excluding allowances and benefits in kind. Housing, transport and similar allowances are not in the base.

Does resigning reduce my gratuity?

Not under the current law. The 1980 labour law reduced the gratuity of an employee who resigned before five years; Federal Decree-Law No. 33 of 2021 contains no such provision. The entitlement is the same whether the contract ends by resignation, non-renewal or termination.

What if I have worked for less than one year?

No gratuity is due. Article 51(2) requires a year of continuous service, and Article 51(4) excludes unpaid days of absence from the count. Temporary employment of under a year is also excluded by Cabinet Resolution No. 1 of 2022, Article 30.

How is gratuity calculated for part-time employees?

Cabinet Resolution No. 1 of 2022, Article 30: divide the contracted hours per year by the hours in a full-time contract, and apply that percentage to the full-time gratuity. The calculator uses contracted hours per week against the 48-hour full-time week.

Is there a maximum gratuity?

Yes. Article 51(6) caps the total at two years’ wage. The calculator applies 24 times the last monthly basic wage, the reading used in practice; the article’s word is “wage”, the wider defined term, so the true ceiling may be higher. The cap only bites after roughly 25 years of service.

Does this apply in free zones such as JAFZA, or in Abu Dhabi?

Yes. The Decree-Law applies to private-sector employment across the UAE, including free zones, with two exceptions: the DIFC and ADGM have their own employment laws and end-of-service rules. UAE nationals come under the pension legislation rather than Article 51.

When must gratuity be paid?

Within 14 days of the end date of the contract, together with wages and other entitlements — Article 53. The employer may deduct amounts lawfully due from the worker under Article 51(7), on the conditions in Cabinet Resolution No. 1 of 2022, Article 29.

What is the alternative end-of-service savings scheme?

A voluntary scheme under Cabinet Resolution No. 96 of 2023 in which the employer pays monthly contributions into an approved investment fund — 5.83% of basic wage for service under five years and 8.33% after — instead of accruing a gratuity. Benefits accrued under the Decree-Law before joining are calculated at that date, on the basic wage at that time, and paid when employment ends.

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Tools/UAE Gratuity Calculator

End of service · Federal Decree-Law No. 33 of 2021

UAE gratuity
calculator.

End-of-service gratuity worked from Article 51 of the Labour Law — every figure traced to its clause, the conventions the law leaves open stated on the page, and the monthly provision an employer should be booking. A second tab totals the whole final settlement around it.

Free · computed in your browser · sources and assumptions below · updated 8 Sep 2026

How is end-of-service gratuity calculated in the UAE?

Under Article 51 of Federal Decree-Law No. 33 of 2021, a full-time foreign worker who completes one year of continuous service is entitled to 21 days of basic wage for each of the first five years and 30 days of basic wage for each year after that, pro-rata for part years, capped at two years’ wage and paid within 14 days of the end of service. The Decree-Law does not reduce the figure when the employee resigns, and it does not state how a day’s wage is derived from a monthly wage — this calculator applies the ÷30 convention and says so.

The first tab calculates the gratuity from the Labour Law. The second is a worksheet: those figures are yours to enter, nothing there is worked out for you, and they differ from one company to the next. Both start filled with an invented example until you change them.

Work it out

Last monthly basic wage (AED)

Basic only — allowances are excluded (Articles 1 and 51(5)).

Employee

UAE nationals come under the pension legislation (Article 51(1)).

First day of service

Type, paste or pick — dd/mm/yyyy. Counted as a day worked.

Last day of service

The last day is worked too, so both ends count.

Unpaid absence (days)

Not counted as service (Article 51(4)).

Joined the savings scheme on

Optional. Freezes Decree-Law accrual at this date (Cabinet Resolution 96 of 2023).

The figures shown are an invented example until you change them. Nothing you type leaves your browser unless you ask for the statement below.

Gratuity payable

AED 32,712

2,040 days of service · 5.58 years · a day = AED 267 (basic ÷ 30)

First five years · 5.00 yrs × 21 daysAED 28,000

Beyond five · 0.58 yrs × 30 daysAED 4,712

Gratuity dueAED 32,712

Pay by (Art. 53)14 Oct 2026

Accrual to book each monthAED 667 · 8.33%

At ÷ 30.4167 instead of ÷ 30AED 32,264

This is the entitlement before any deduction. An employer may set pending dues against it — Article 51(7) permits deducting amounts owed by law or under a court judgment, and Cabinet Resolution 1 of 2022, Article 29 lists which: loans and overpayments, contributions to pension or insurance, debts under a court ruling, penalties under a disciplinary regulation approved by the Ministry, and the cost of damage the employee caused — the last two only where the Decree-Law’s own procedures were followed and not more than three months have lapsed since the amount fell due, unless otherwise agreed (Cabinet Resolution 1 of 2022, Article 29(2)).

No reduction for resignation: Federal Decree-Law No. 33 of 2021 contains none (Article 51(2)).

The last pay run, line by line

These figures are yours to enter — the page does not work them out. They sit in your contract, your payroll and your employer’s own policy, and they differ from one company to the next. The gratuity is carried across from the other tab. Anything this page does not name — overtime, a commission, a repatriation ticket, an asset not returned — goes in the free rows.

One thing worth knowing before you fill them in: a settlement mixes two different wage bases. Gratuity and unused leave are calculated on the basic wage; unpaid salary and any notice allowance are on the full wage, allowances included.

Add

Unpaid salary (AED)

Salary earned but not yet paid, on the full wage — basic plus allowances (Article 1, “Wage”).

Unused annual leave (AED)

Encashed on the BASIC wage, not the full one — Article 29(9) and Cabinet Resolution 1 of 2022, Article 19(2). Article 29(1) sets the statutory floor at “not less than” 30 days a year, or 2 days a month between six months and a year, pro-rata for the final part-year — your contract may give more.

Notice period allowance (AED)

Where the EMPLOYER did not serve notice. Article 43(3) makes the allowance payable by whichever party failed to serve it — so if the employee left without serving notice the same amount runs the other way, and belongs under Deduct below. It is the full wage for the unserved part (43(4)); the period is 30 to 90 days under the contract, and shorter during probation (Article 9).

Description 1

Amount (AED)

Description 2

Amount (AED)

Deduct

Loan or advance recovered (AED)

Article 25(1)(a) allows it against the wage with the employee’s written agreement, without interest, and within that Article’s monthly ceiling. Recovering a whole outstanding balance in one settlement is a matter for the loan agreement, not something Article 25 authorises by itself.

Penalties or fines (AED)

Only under a disciplinary regulation approved by the Ministry, and capped at 5% of the wage — Article 25(1)(f).

Description 1

Amount (AED)

Description 2

Amount (AED)

Nothing you type leaves your browser unless you ask for the statement below.

Net final settlement — your figures

AED 32,712.33

AED 32,712.33 owed

End-of-service gratuityAED 32,712.33

Net payableAED 32,712.33

Pay by (Art. 53)14 Oct 2026

This panel is your worksheet, not our figure. Only the gratuity line is calculated from the law — every other line is a number you typed, and we have not seen your contract, payroll or ledger.

Everything here — wages, leave and the gratuity — falls due within 14 days of the end date (Article 53).

Deductions from the wage are capped by Article 25: 5% for penalties, 20% to recover an overpayment, a quarter for a court-ordered debt (more is allowed for awarded alimony), five days’ wage a month for damage (more only with the court’s approval), and 50% in total however many reasons there are. A loan needs the employee’s written agreement and carries no interest. Deductions from the gratuity run under a different rule — Article 51(7) with Cabinet Resolution 1 of 2022, Article 29 — which sets no percentage.

If you are the employer

Book it monthly, not on the leaving day.

The liability grows every month the employee stays: 21/30 of a month’s basic wage a year for the first five years, a full month a year after that — 5.83% and 8.33% of basic wage a month, the same fractions Cabinet Resolution 96 of 2023 sets as savings-scheme contributions. Accrue it, and the year-end provision reconciles to the payroll list instead of surprising the accounts.

The statement puts this case on one page — the figure, the breakdown by article, the pay-by date and the monthly accrual — for the file. If you are the employee, the figure above is yours to use; no form needed.

We run payroll, the end-of-service provision and the year-end schedule as part of bookkeeping. Talk to us →

Employer statement (PDF)

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Indicative calculation · instant PDF · not legal or tax advice.

Where the text is silent

What this page assumes.

A day’s wage: The Decree-Law fixes the entitlement in days of basic wage and does not say how a day is derived from a monthly wage. This page uses monthly basic ÷ 30 and shows the figure at ÷ 30.4167 beside it.
The ceiling: Article 51(6) says “two years’ wage” — the defined term that includes allowances. The page applies 24 × last basic wage, the reading used in practice, and flags it when it bites.
A day of service: Both ends count here: an employee works their first day and their last day, so service is taken as the difference between the two dates plus one. The Decree-Law does not state the convention. Subtracting the dates alone gives one day less, and 364 days for a full calendar year — a difference worth checking against whichever basis your payroll uses.
A year: Years of service are counted as 365-day blocks on calendar days served, less unpaid absence. The difference from anniversary counting is a day or two.
Amounts the employee owes: The figure is the entitlement, not the cheque. Article 51(7) lets an employer deduct amounts due by law or under a court judgment, and Cabinet Resolution No. 1 of 2022, Article 29 sets out the cases — loans and overpayments, contributions to pension or insurance, debts under a court ruling, penalties under a disciplinary regulation approved by the Ministry, and the cost of damage the employee caused — the last two only where the Decree-Law’s own procedures were followed and not more than three months have lapsed since the amount fell due, unless otherwise agreed (Cabinet Resolution 1 of 2022, Article 29(2)). Those turn on documents this page cannot see, so it states the right rather than netting off a number you would have to guess.
The settlement tab: Only the gratuity is calculated. Unpaid salary, unused leave, notice, loans, penalties and the free rows are figures the visitor enters, because they turn on a contract, a payroll run and a ledger this page cannot see. The tab adds them up and applies the signs; it does not check them, and what a settlement contains varies from one company to the next.
Which wage: Two bases run through a settlement, and mixing them is the common error. Gratuity and unused leave are computed on the BASIC wage (Articles 51(2) and 29(9) of Cabinet Resolution 1 of 2022); unpaid salary and pay in lieu of notice run on the FULL wage as defined in Article 1 and required by Article 43(4).
Scope: Employers under the federal Labour Law, mainland and free zones. DIFC and ADGM have their own employment laws. UAE nationals come under the pension legislation.

Sources

Read the text yourself.

The Ministry’s English texts state that they are not official translations; the Arabic texts govern. This page is general information on published law, not advice on any person’s position.

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