The UAE Labour Law that governs end-of-service gratuity for the private sector, effective from 2 February 2022. Here are the rules that drive every figure in this calculator.
The decree-law replaced the 1980 Labour Law and unified all private-sector contracts into fixed-term agreements. For end-of-service gratuity it kept the familiar day-count but removed the penalties that once reduced a resigning employee’s pay-out. The result is simpler and more generous: complete a year, and your gratuity is calculated the same way whether you resign or are dismissed.
| Topic | Old — 1980 law | New — Decree-Law 33/2021 |
|---|---|---|
| Contract types | Limited and unlimited contracts | All contracts are fixed-term |
| Resignation pay-out | Reduced to 1/3 or 2/3 by length of service | Full gratuity after one year — no reduction |
| Calculation basis | Last basic wage | Last basic wage (unchanged) |
| Day-count rate | 21 days first 5 years, 30 days after | 21 days first 5 years, 30 days after (unchanged) |
| Maximum | Two years’ total pay | Two years’ total pay (unchanged) |
All final entitlements, including gratuity, are due within 14 days of the contract ending. Gratuity is calculated on the basic wage only; housing, transport and similar allowances are excluded by law. Free zones such as DIFC and ADGM may operate their own savings schemes — for example DEWS — which can produce different figures.
Official source. The authority on end-of-service entitlements is the UAE Ministry of Human Resources and Emiratisation (MOHRE). This page is a plain-language summary and is not legal advice.