Introduction:
The United Arab Emirates has long been a global hub for expatriates drawn by its thriving economy, safety, and tax-free salaries. If you’re an expat working in the UAE, understanding your End of Service Benefits (EOSB)—commonly referred to as gratuity—is essential to protect your financial rights when your job ends.
Gratuity is a statutory lump-sum payment owed to employees at the end of their employment, governed by the Federal Decree-Law No. 33 of 2021, and its most recent amendments. Whether you resign, complete your contract, or are terminated, this comprehensive 2025 guide will help you understand how your gratuity is calculated, what affects your entitlement, and how to ensure you receive your full dues.
Are Expats Entitled to Gratuity in the UAE?
Yes. All private-sector employees in the UAE—including expatriates—are legally entitled to gratuity, provided they meet specific conditions. While UAE nationals participate in a separate pension system, gratuity is the primary end-of-service benefit for expats.
However, this entitlement excludes:
- Government sector employees (covered by other regulations)
- Workers dismissed for gross misconduct
- Employees with service periods of less than one full year
Eligibility Criteria for Gratuity (Expats)
To qualify for gratuity, an expat must meet the following conditions:
✅ At least 1 full year of continuous service
✅ Valid employment contract (limited or unlimited)
✅ Lawful termination or resignation
✅ Not dismissed for gross misconduct (as defined in Article 44 of UAE Labour Law)
💡 Tip: Always check your contract for clarity on your start date, notice periods, and salary breakdown.
Key Factors That Affect Your Gratuity:
Understanding these elements will help you anticipate your final entitlement accurately:
1. Basic Salary Only
Gratuity is based only on your final basic monthly salary.
Excludes: housing, transport, phone, commission, or other allowances.
2. Contract Type
- Limited (Fixed-Term): Standard post-2022; governs most current contracts.
- Unlimited (Open-Ended): Still valid for some workers hired before Feb 2022.
The contract type impacts gratuity upon resignation, particularly under older unlimited contracts.
3. Length of Service
- Minimum eligibility: 1 full year
- Pro-rated calculation applies for partial years beyond the first
4. Reason for Leaving
- Resignation, termination, or contract completion each affect the gratuity outcome.
- For example, resignation on an unlimited contract may reduce your entitlement based on service years.
How Gratuity Is Calculated (2025 Formula)
Under UAE Labour Law, gratuity is calculated in two stages:
| Years of Service | Gratuity Per Year |
|---|---|
| First 5 years | 21 days’ basic salary per year |
| After completing 5 years | 30 days’ basic salary per year |
🧮 Calculation Formula:
Gratuity =
(21 days ÷ 30) × Basic Salary × Years (1–5) +
(30 days ÷ 30) × Basic Salary × Years (6+)
🔒 Cap: Maximum gratuity cannot exceed 2 years’ basic salary.
What Happens If You Resign as an Expat?
📉 If You Resign Before 1 Year
❌ No gratuity—regardless of contract type or reason for resignation.
📃 Limited Contract (Post-2022)
- Completed contract term: ✅ Full gratuity applies
- Resigned before term ends: ❌ Gratuity may be forfeited unless resignation is legally justified (e.g., unpaid salary, Article 45)
📄 Unlimited Contract (Pre-2022)
- 1–3 years of service → Eligible for 1/3 of gratuity
- 3–5 years → Eligible for 2/3
- 5+ years → Full gratuity applies
🛡️ If you’re resigning, try to align your exit with either full contract completion or the 5-year milestone to avoid gratuity reduction.
Example Gratuity Calculations for Expats
Scenario 1 – Resignation After 3 Years (Unlimited Contract)
- Basic salary: AED 6,000
- Gratuity for 3 years =
((6,000 ÷ 30) × 21 × 3) = AED 4,410 - Eligible for 1/3 due to resignation:
AED 4,410 × 1/3 = AED 1,470
Scenario 2 – Termination After 7 Years (Limited Contract)
- Basic salary: AED 10,000
- First 5 years: AED 35,000
- Years 6–7: AED 20,000
- Total gratuity: AED 55,000
(Employer termination, not for misconduct)
Scenario 3 – 11-Year Completion (Limited Contract)
- Basic salary: AED 12,000
- First 5 years: AED 42,000
- Remaining 6 years: AED 72,000
- Total gratuity: AED 114,000
Legal Protections for Expats: Know Your Rights
✔️ 14-Day Payment Window
Employers must pay gratuity and all dues within 14 days of your final working day.
❌ No Unlawful Deductions
Deductions are only permitted for legal claims or documented debts (e.g., company loans).
📞 File Complaints via MoHRE
If your gratuity is delayed or disputed, contact the Ministry of Human Resources & Emiratisation (MoHRE):
- Call center: 600 590000
- Website: mohre.gov.ae
How to Use a Gratuity Calculator (For Expats)
Gratuity calculators are excellent tools for estimating your entitlement instantly.
🔍 Inputs Required:
- Last basic salary
- Employment start and end dates
- Contract type (limited or unlimited)
- Reason for job termination
🎯 Benefits for Expats:
- Quick and accurate EOSB forecast
- Helps you compare with employer’s final settlement
- Useful for resignation planning or job switching
💡 Try our trusted UAE Gratuity Calculator for a fast, accurate estimate.
Final Tips for Expats Leaving the UAE
📌 Double-check your final settlement — don’t rush signing
📁 Keep records — save salary slips, contracts, emails
🛑 Do not sign anything if your gratuity isn’t included
📅 Know your notice period — resign properly to avoid penalties
⚖️ Consult a lawyer or HR advisor if unsure about your rights
Conclusion
Your End of Service Benefits are more than a legal requirement—they’re your earned reward for service. As an expat, knowing how gratuity is calculated, what conditions apply, and how to protect your rights can save you from financial loss.
The UAE Labour Law offers strong protection—but understanding the rules is your responsibility. By planning carefully and using reliable tools like gratuity calculators, you can leave your job with peace of mind—and with the compensation you deserve.