UAE Gratuity Calculator
✓ 2026 Labor Law Compliant
Exclude allowances. No minimum salary threshold.
How Resignation and Termination Affect Your Gratuity
Under previous UAE labor regulations, resigning from an unlimited contract before completing five years of service resulted in substantial deductions to your end-of-service benefits. However, with the implementation of Federal Decree-Law No. 33 of 2021, the landscape has fundamentally changed. Today, all private sector employment contracts are fixed-term, and the method of calculation is universally applied regardless of whether you choose to resign or your employer terminates your contract.
As long as you have completed at least one continuous year of service, you are entitled to your full end-of-service gratuity. The formula remains strictly based on your basic salary: 21 days for each of the first five years, and 30 days for any subsequent years. The punitive reductions for early resignation are entirely abolished under the current law.
The Exception: Termination for Gross Misconduct
While standard terminations and resignations are treated equally regarding gratuity calculations, there is a critical exception. If an employee is summarily dismissed under Article 44 of the UAE Labour Law for gross misconduct—such as workplace assault, submitting forged documents, or disclosing confidential company secrets—the employer maintains the right to withhold end-of-service gratuity.
In standard cases of termination for performance or redundancy, or if you voluntarily resign to pursue another opportunity, your gratuity must be paid in full within 14 days of your final working day alongside other final settlement dues like leave encashment.
Frequently Asked Questions
Will my gratuity be reduced if I resign after only 2 years?▼
No, under the current UAE Labour Law (Decree-Law No. 33 of 2021), there is no longer a reduction for resigning before five years. As long as you have completed at least one year of continuous service, you are entitled to the full 21 days of basic salary for each year served.
When must my employer pay my gratuity after termination or resignation?▼
According to Article 53 of the UAE Labour Law, employers are legally obligated to settle all end-of-service entitlements, including gratuity, unpaid wages, and leave encashment, within 14 days of the employee’s contract termination or final working day.
Can my employer deduct my notice period payout from my gratuity?▼
If you resign and fail to serve your contractual notice period, the employer is legally entitled to deduct compensation in lieu of notice from your final settlement, which can include lawful deductions from your total gratuity payout. Always serve your notice period or secure a written waiver from your employer to avoid financial penalties.