UAE Gratuity (End of Service) in 2025: Eligibility, Formula and Accurate Calculation + Free Calculator
Learn how gratuity is calculated in the UAE for full‑time employees: eligibility, how basic wage and years of service determine the amount, the standard 21/30‑day rules per year, resignation vs termination notes, and statutory maximum caps. Use our free Gratuity Calculator to estimate your EOS precisely.
Updated: Oct 27, 2025 · 10 min read · By ADAD Team
Quick summary
- Eligibility: EOS gratuity is typically due after completing at least one year of continuous service (exceptions apply).
- Basis: Calculated on basic wage (excluding allowances) and years of service.
- Rates: Commonly 21 days of basic wage per year for the first 5 years, then 30 days per year thereafter; pro‑rated for partial years.
Eligibility
Full‑time private sector employees are generally entitled to EOS gratuity after completing one year of service. Certain termination reasons (e.g., gross misconduct) may affect entitlement. Always refer to the latest UAE Labour Law and your contract.
Gratuity formula (typical)
- First 5 years: 21 days of basic wage for each year of service.
- Beyond 5 years: 30 days of basic wage for each additional year.
- Partial years: Calculated pro‑rata based on months/days.
Note: The law caps the total gratuity at a maximum equivalent to 2 years of wage. Contract terms and termination reasons can influence eligibility; always verify against current law and official guidance.
Resignation vs termination
Under current law, gratuity is tied to length of service rather than the old limited/unlimited contract distinctions. Some scenarios (such as dismissal for specific causes) can affect or forfeit gratuity. Check official guidance for your case.
Maximum caps
Total EOS gratuity is capped by law (commonly at two years of wage). Your contract and the latest regulations govern exact limits.
How to calculate accurately
- Confirm eligibility and termination reason.
- Identify basic wage (exclude allowances/benefits).
- Count complete years and prorate partial year service.
- Apply 21/30‑day rules and ensure total does not exceed the legal cap.
Use our Gratuity Calculator to compute this instantly.
FAQs
- Probation? Typically, gratuity is not due during probation.
- Allowances? Not included in basic wage for EOS.
- Breaks in service? Can affect continuous service; check HR records.
This is a general guide. For exact entitlements, consult MOHRE guidance and your contract.
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