Everything you are owed
Note: Educational estimate for planning. Confirm final amounts on official channels.
The four parts, and why they use different numbers
A final settlement is not one calculation. It is four, and they deliberately do not share a base — which is exactly why people arrive at a figure that does not match their employer’s.
- Gratuity — on basic salary only. 21 days per year for the first five years, 30 days a year after that, capped at 24 months’ basic.
- Unused annual leave — on your full package, basic plus allowances.
- Notice pay in lieu — on your full package.
- Final part-month — on your full package, for days actually worked.
So someone on AED 10,000 basic plus AED 5,000 allowances accrues gratuity on 10,000 and leave salary on 15,000. Mixing those two up is the most common error in both directions.
Resigning no longer cuts your gratuity
Under the old 1980 law, resigning before five years reduced gratuity to one third or two thirds depending on length of service. Federal Decree-Law No. 33 of 2021 repealed that. In force since 2 February 2022, resignation and termination now pay the same gratuity once you have completed one year.
This matters because the belief persists. At least one labour guide still describes the old sliding scale as current, and employers occasionally apply it. If yours does, the provision to point at is Article 51.
Two things still remove it: service under one year earns no gratuity at all, and dismissal for gross misconduct under Article 44 can forfeit it.
The cap, and when it actually bites
Total gratuity is capped at two years’ pay — 24 months of basic salary. On the 21-and-30-day formula that ceiling is only reached after roughly 25.5 years of service, so almost nobody meets it.
It is worth knowing anyway if you are long-serving, because the accrual rate effectively stops there. Past that point an extra year of service adds nothing to the gratuity figure.
Unused leave: the part most people underestimate
UAE annual leave accrues at 30 calendar days a year after the first year, and untaken days are payable on exit. Because leave salary uses the full package, not basic, it is often a larger line than people expect — 15 untaken days on a AED 15,000 package is AED 7,500, which can rival a year of gratuity.
Check your own accrual against what HR has recorded before you sign anything. Disputes over the leave balance are more common than disputes over the gratuity formula, because the formula is fixed and the balance is a record-keeping question.
Notice, and being paid in lieu
Notice periods run from 30 to 90 days depending on your contract. You either work the notice and are paid normally, or the employer pays in lieu — compensation in place of the notice, on your full package.
If you resign without serving notice, the employer may claim compensation from you instead, which is the mirror image of the same rule. The notice period calculator covers the timing; this page covers the money.
Worked examples
Gratuity about AED 31,500 on basic. Leave salary AED 7,500 on the full package. Settlement around AED 39,000 before any notice or part-month.
Identical. The 2021 law removed the resignation reduction — if your employer applies one third or two thirds, that is the old law.
No gratuity at all — the entitlement starts at one completed year. Unused leave and your final part-month are still payable.
How to use this calculator
- Enter your basic salary and allowances separately — they are used for different parts.
- Enter completed years and any additional months of service.
- Pick how you are leaving; under the current law this does not change the gratuity.
- Enter unused annual leave days from your own record, then check it against HR’s.
- Add notice days only if you are being paid in lieu rather than working them.
- Add days worked in a final part-month if your last day is not a month end.
- Enter any agreed deductions such as outstanding loans.
- Compare the breakdown line by line against your employer’s settlement sheet.
Frequently asked questions
What is included in a UAE final settlement?
Four things: end-of-service gratuity, payment for unused annual leave, notice pay if you are paid in lieu rather than working your notice, and salary for days worked in your final part-month. Agreed deductions such as outstanding loans come off the total.
Is gratuity calculated on basic salary or total salary?
Basic salary only. Allowances are excluded from gratuity. They are included in leave salary, notice pay and your final month, which is why those lines use a larger figure than the gratuity line does.
Does resigning reduce my gratuity in the UAE?
No. Federal Decree-Law No. 33 of 2021, in force since 2 February 2022, repealed the old one-third and two-thirds reductions. Resignation and termination now pay the same once you have completed one year of service. Some guides and employers still apply the old rule — the provision to cite is Article 51.
How much gratuity after 5 years in the UAE?
Five years earns 21 days of basic pay for each year, which is 105 days, or about 3.5 months of basic salary. On AED 10,000 basic that is roughly AED 35,000. From year six the rate rises to 30 days a year.
Do I get gratuity if I leave before one year?
No. The entitlement begins at one completed year of service. You are still owed unused annual leave and pay for days worked in your final month.
How is unused annual leave paid out?
On your full package — basic plus allowances — not on basic alone. Annual leave accrues at 30 calendar days a year after the first year, and untaken days are payable on exit. Check your accrued balance against HR’s record, as that is where most disputes arise.
Is there a cap on UAE gratuity?
Yes, two years’ pay — 24 months of basic salary. On the standard formula that is only reached after roughly 25.5 years of service, so very few people meet it.
When must my employer pay the final settlement?
Within 14 days of the end of the contract is the figure cited across UAE labour guidance. We have not transcribed that deadline from the statute text, so treat it as the widely reported position and raise a delay with MoHRE if it is not met.
Can my employer deduct from my settlement?
Agreed and documented amounts such as outstanding loans, salary advances or unreturned company property can be deducted. Arbitrary deductions cannot. If you disagree with a deduction, MoHRE handles labour complaints.
Do you store my numbers?
No. Calculations run in your browser and nothing is sent to a server. See our Privacy Policy for analytics and AdSense cookie details.
Where these figures come from
The gratuity formula follows Federal Decree-Law No. 33 of 2021 on employment relations, in force since 2 February 2022, published by the Ministry of Human Resources and Emiratisation: 21 days of basic pay per year for the first five years, 30 days a year thereafter, capped at two years’ total pay, with no entitlement below one completed year and a daily rate of basic ÷ 30. The same figures are used on this site’s gratuity calculator, and this page was checked to agree with it at every service length.
The repeal of the resignation reduction — the old 1980 law’s one-third and two-thirds scale for resigning before five years — is reported consistently across UAE labour commentary citing Article 51. One guide still describes the old scale as current, and the page names that disagreement rather than hiding it. The 14-day payment deadline is widely cited but we have not transcribed it from the statute, so it is described as reported.
Last checked against the source: 30 October 2026. Your contract may give you better terms than the statutory minimum, and it governs where it does. Not legal advice — MoHRE handles labour disputes. Not affiliated with MoHRE.
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Disclaimer
Disclaimer: Educational estimate following Federal Decree-Law No. 33 of 2021. Your contract may provide better terms than the statutory minimum and governs where it does. The 14-day payment deadline is widely reported rather than transcribed here from the statute. Not legal advice — MoHRE handles labour disputes. Not affiliated with MoHRE or any UAE authority.