The general private-sector framework

The UAE government's guidance for eligible expatriate private-sector workers says:

  • At least one year of continuous service is generally required.
  • Unpaid absence is excluded from the service calculation.
  • Gratuity is based on the worker's last basic salary, excluding allowances such as housing and transport.
  • The stated calculation is 21 days of basic salary for each year during the first five years and 30 days for each year after the first five.
  • The total is subject to a two-year wage cap.
  • Outstanding wages and end-of-service entitlements generally must be paid within 14 days after the contract ends.

Read the complete and current official end-of-service guidance (opens in a new tab) before relying on any calculation.

A simplified illustration

Suppose two employees each receive AED 20,000 in fixed monthly compensation:

  • Employee A: AED 15,000 basic + AED 5,000 allowances
  • Employee B: AED 8,000 basic + AED 12,000 allowances

Under a traditional calculation tied to basic salary, their gratuity bases differ even though their headline monthly packages match. This is why candidates should negotiate and record the split, not only the total.

When a calculator is not enough

Your result can change based on service dates, unpaid leave, work pattern, worker category, amounts owed and whether an approved alternative end-of-service savings scheme applies. Government, domestic-worker and some free-zone arrangements may also differ.

Before resigning or accepting a settlement:

  1. Check the basic salary in the registered contract.
  2. Confirm start and final working dates.
  3. Identify unpaid absence.
  4. Review deductions in writing.
  5. Determine which end-of-service system applies.
  6. Compare the employer's calculation with current official guidance.

Make package comparisons more honest

WorkHabibi separates basic salary from allowances so workers can compare economically similar offers properly.