What the law actually says

Which law applies to you

End-of-service gratuity for private-sector employees in the UAE is governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relations, together with its Executive Regulations. It replaced Federal Law No. 8 of 1980 — the law almost all older guidance is describing — and took effect on 2 February 2022. It has since been amended three times, by Federal Decree-Laws 14 of 2022, 20 of 2023 and 9 of 2024.

Several groups sit outside it, and the official guidance names them. Employees of federal and local government entities are not covered by the private-sector law. Domestic workers are covered by their own law — Federal Decree-Law No. 9 of 2022 — which carries a different end-of-service formula entirely. Armed forces, police and security personnel are outside it. Some financial free zones also operate their own employment regimes with their own end-of-service rules; this site has not read those regimes and does not model them, so if your contract names one, that regime governs rather than anything here.

And since 2023 there is a group that is inside the law but outside this calculation: an employee whose employer has enrolled them in the alternative end-of-service system. Their entitlement is a fund balance rather than a formula.

One exclusion catches people out more than the rest, and the calculator on this site asks about it directly: an Emirati working in the private sector is not covered by this computation. Their end-of-service is delivered through the pensions and social-security legislation instead. A calculator that does not ask hands them a figure about the wrong law — so this one stops rather than answering.

Source: The UAE Government portal u.ae, on end-of-service benefits in the private sector, quoting it directly: “End-of-service benefits for Emiratis working in the private sector will be in accordance with the legislation regulating the pensions and social securities in the UAE.”

Who qualifies goes through each of these, including the two the calculator asks about directly.

About the words “Article 51”

You will find that phrase on every page about this subject, including on pages that disagree with each other about what the article says. It is worth being straight about what this site does and does not know.

The figures below come from the UAE Government’s own portal at u.ae, which publishes the operative rules in English and which was read directly. The article number did not come from there. We tried four routes to the gazette text of Federal Decree-Law No. 33 of 2021 — the federal legislation portal, the Ministry’s own site, and two mirrors — and reached none of them. So “Article 51” is, for us, a citation we have located and not one we have verified, and you will not find it presented as a source anywhere on this site.

That is a smaller admission than it sounds and a more useful one than it looks. The rules are correct and they are on an official government page you can open right now. What we cannot tell you is where in the statute to find them — and a site that tells you an article number it has not read is sending you to look for something that may not be there.

What the law does

Read in order, the end-of-service provision does five things, and the calculator on this site follows the same order.

1. A qualifying period. Below 1 full year of continuous service, no gratuity is due at all. Above it, the whole period counts — not just the part above the threshold.
2. The basis: your last basic wage. The calculation runs on the basic wage you were entitled to on your last day, explicitly not including housing, transport, utilities or furniture allowances. It is the last basic wage, not an average across your service, so a raise or a reduction shortly before you leave re-prices your entire period.
3. A day-rate that steps up. You earn 21 days of wage for each year up to year 5, and 30 days for each year after that. The step is not retroactive: reaching year 6 does not re-rate the earlier years upward, because the higher rate applies to the years following the first 5.
4. A daily wage from your monthly one. Your monthly basic is divided by 30 to get one day’s pay. This is the one figure on this page we could not find stated on an official government source — it is universally applied and it is what every UAE calculator uses, but it multiplies the whole result, so the calculator says so on every answer it gives.
5. A ceiling. The total cannot exceed 24 months’ wage. Expressed as a multiple of wage rather than a fixed dirham amount, so it scales with the salary instead of eroding — in practice it only binds at long tenure.

What the provision conspicuously does not do is reduce the entitlement according to who ended the relationship. That is the single biggest change from the old regime, and it is covered below.

Payment, and what may be deducted

The provision does not stop at the amount. It also fixes when the money is due and what the employer may set against it.

That last row is worth reading twice. The permission is real and the limits on it are not something this site can state — which is a gap in what we can tell you rather than evidence that there are none. If an amount is being taken off your settlement, the question to ask is which debt it corresponds to. What else is in a final settlement.

The part-year, and how precisely it is measured

A part-year is pro-rated: it earns the matching fraction of the rate for the band it falls in, so leaving part-way through a year pays the matching part. What the official guidance does not state is the granularity.

What changed in February 2022, and why it matters here

Federal Decree-Law No. 33 of 2021 did not merely amend the 1980 law. Two of its changes make most pre-2022 guidance about gratuity actively wrong rather than merely dated.

The unlimited contract was abolished

Under the old law, UAE employment contracts came in two kinds — limited (fixed-term) and unlimited — and which one you were on changed your end-of-service entitlement, your notice and your exposure on early termination. The 2021 law abolished the unlimited contract. Every private-sector contract is now fixed-term, and employers were required to move existing staff onto the new form during a transition period that closed in February 2022.

This is why the calculator here does not ask whether your contract is limited or unlimited: the question no longer has two answers. A calculator that still asks it is modelling a regime that has not existed for over four years, and the answer it gives for “unlimited” is not a conservative estimate — it is a rule that was repealed.

The resignation reduction was repealed

Under the 1980 law an employee who resigned from an unlimited contract, rather than being terminated, could lose a substantial share of the gratuity — a third or two-thirds depending on length of service. That provision is gone. Under the 2021 law the full entitlement is due whether you resign or are let go, and the only thing that comes off is money you actually owe.

This is the change most calculators have not made. The resignation-versus-termination page goes through it properly, including what genuinely can still reduce a settlement.

The amendments, and what we can say about them

The 2021 decree-law has been amended three times. We have found no change to the end-of-service provision across the three — and the basis for saying so is weaker than the basis for everything else on this page, so here is exactly what it is.

Reading the source yourself

Everything above is checkable, and it should be checked. The UAE Government portal at u.ae publishes an end-of-service gratuity page that states the operative rules in English; the Ministry of Human Resources and Emiratisation (MOHRE) is the authority for the employment relationship itself, including the settlement of disputes about what is owed.

Where this page and a cited source disagree, the cited source governs. If you find a disagreement — or if you can reach the gazette text we could not — tell us and point at it. Corrections are the most useful thing anyone sends this site.