End of Service Gratuity UAE 2025: Rates and How to Claim

End of Service Gratuity in the UAE 2025: How to Calculate and Claim Yours

End of service gratuity is the statutory payment an employee receives when employment in the UAE comes to an end. For the employee it is often the largest single sum collected on leaving a job. For the employer it is a liability that has to be accrued and settled on time. As of 2025, the regulations governing this gratuity continue to evolve, so knowing how the end of service gratuity UAE rules work protects both sides when a contract finishes.

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This guide from Nour Attorneys explains who qualifies, how the amount is worked out, and what to do when an employer does not pay. It follows the UAE Labour Law, Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (the "New Labour Law"), and its executive regulations. The provisions apply to expatriates and UAE nationals alike, and they are worth reading before you sign a final settlement.

Related: Speak to our employment lawyers in Dubai about your own entitlement.

Who Qualifies for End of Service Gratuity in the UAE

Under the New Labour Law, an employee who has completed at least one year of continuous service is generally entitled to an end of service gratuity. The entitlement covers both limited and unlimited contracts, and the conditions surrounding the departure decide whether it is paid in full or in part. The law sets out to treat all workers on the same footing, so that service is recognised when employment stops.

Some groups are treated differently. Employees on certain part-time contracts, and employees dismissed for gross misconduct, may find their gratuity entitlement affected. If your situation falls into one of those categories, settle the point before agreeing to any figure.

Related: Explore our labour dispute lawyers in Dubai.

Service also has to be continuous. A break in service that the employer has not approved, and that the law does not require, can shorten the period used in the calculation; maternity leave is an example of a break the law protects. Keep a record of any unpaid leave or gap between contracts, because it changes the arithmetic.

Related: We also act in real estate disputes in the UAE.

The Ministry of Human Resources and Emiratisation (MOHRE) oversees how these rules are applied and gives employees a route to resolve disagreements about eligibility or the amount owed. Eligibility and the length of qualifying service are the starting point for every claim. For advice on the facts of your own case, speak to our team about end of service gratuity in the UAE.

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Calculating Your End of Service Gratuity

Gratuity is calculated on the employee's last basic salary and the length of continuous service. The New Labour Law largely harmonised the treatment of limited and unlimited contracts, but the underlying principle has not changed: a set number of days' basic salary for each year worked.

Basic salary is not the same as total pay. Only basic salary counts towards gratuity. Housing, transport, utilities and similar allowances are excluded, which is why a gratuity figure is usually well below what the monthly payslip total would suggest. Where a contract does not separate basic salary from allowances clearly, that is the first point to settle, because the split drives every figure that follows.

Related: Read our UAE labour law advisory service page.

The Calculation Formula

The gratuity is calculated as follows:

• For the first five years of service: 21 days' basic salary for each year of service.
• For service exceeding five years: 30 days' basic salary for each year of service, provided that the total gratuity does not exceed two years' remuneration.

Fractions of a year are paid proportionally, as long as the employee has completed at least one year of service. An employee who has worked four years and six months is paid for the final six months pro rata at the 21-day rate. The maximum gratuity payable is capped at two years' basic salary, however long the service, which holds the balance between what the employee is owed and what the employer has to carry.

A worked example:

• 1-5 years: basic salary AED 5,000; rate 21 days per year; calculation (5,000 / 30) x 21 x years; total gratuity varies.
• 6+ years: basic salary AED 5,000; rate 30 days per year; calculation (5,000 / 30) x 30 x years; total gratuity varies and is capped.

Note: the daily basic salary is normally the monthly basic salary divided by 30.

Run the same arithmetic on your own basic salary before any meeting about the final settlement, so that you are discussing a number you have already tested.

How Resignation and Termination Affect Gratuity

The way employment ends changes what is owed. The New Labour Law sets out separate scenarios for resignation and for termination by the employer, and each carries different consequences for the gratuity payment. The distinction matters to an employee planning to resign and to an employer managing an exit.

Resignation

Under the New Labour Law, an employee who resigns after completing one year but less than five years of continuous service is entitled to a full gratuity. An employee who resigns after five years of continuous service is also entitled to a full gratuity. This is a change from the previous law, under which resigning could reduce the amount payable. The current position protects the employee who chooses to leave, provided the notice period requirements are met.

Termination by the Employer

Where the employer ends the contract, the employee is generally entitled to the full end of service gratuity once the minimum service period is met. The exception is a termination for one of the reasons set out in Article 44 of the New Labour Law, such as gross misconduct or breach of trust, where the right to gratuity may be forfeited. Those grounds are strictly defined and the employer has to produce clear evidence. Employers should follow due process, and employees should test whether the stated ground is genuine. Advice from an employment lawyer in Dubai is worth taking before either side acts.

Claiming Your End of Service Gratuity

A claim starts when the employment ends. The employer must pay the gratuity, together with any other outstanding dues such as notice period pay and accrued leave pay, within 14 days of the termination date. Missing that deadline exposes the employer to penalties and gives the employee grounds to file a complaint with MOHRE.

Steps to Claim

1. Check your contract and service dates: confirm the terms of your employment contract and the exact length of your service.
2. Work out the figure yourself: apply the rates above, so that you can check the amount your employer offers.
3. Read the final settlement: your employer should give you a settlement statement listing every payment, gratuity included. Go through it line by line.
4. Raise a dispute if the figures do not match: where there is a discrepancy, or the employer does not pay, file a complaint with MOHRE. MOHRE offers mediation to settle labour disputes; if mediation fails, the case may be referred to the Labour Court.

Keep full records throughout your employment: the contract, salary slips and any correspondence about your employment or its ending. Those documents decide most disputes. Dates matter as much as amounts: the start date, any change of contract and the final working day all feed the calculation. For help with a claim, or with a dispute that has already begun, contact Nour Attorneys for legal representation.

Conclusion

End of service gratuity is a basic right for employees in the Emirates: recognition of service, and financial support during the move to a new role. The points that matter are the eligibility test, the precise calculation method under the New Labour Law of 2025, and the procedure for claiming. The rules are clear on paper, but individual facts complicate them, including broken service, disputed grounds for dismissal, and allowances mistaken for basic pay. Having the figure checked before you sign is the simplest safeguard. Nour Attorneys advises employees and employers on these rules and on the settlements that follow.

Related Services: Explore our end of service gratuity advice and personal injury and compensation claims services for practical legal support in this area.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.

Nour Attorneys Team

Additional Resources

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