Part of KH Legal’s labour & employment practice.
End-of-service gratuity is the largest single payment most UAE employees ever receive from an employer — and one of the most commonly miscalculated. Wrong basic salary, missing years, “deductions” the law never authorized: the gap between what final settlements offer and what the law requires is where this practice lives.
How Gratuity Is Actually Calculated
Under Federal Decree-Law No. 33 of 2021, full-time employees who complete at least one year of continuous service earn gratuity on their basic salary (not total package): 21 days’ basic pay per year for the first five years, 30 days per year beyond — capped at two years’ total pay. Unpaid leave periods are excluded; accrued annual leave and notice entitlements are calculated separately and added on top.
The Five Classic Underpayment Tricks
- The shrunken basic: calculating on an artificially low “basic” after packing your income into allowances — challengeable when the split doesn’t reflect reality.
- The vanished years: “restarting” service after contract renewals, entity changes or transfers that the law treats as continuous.
- Unlawful deductions: training costs, visa fees, or “damages” subtracted without legal basis.
- The resignation myth: under the current law, resignation does not erase gratuity for employees who completed a year — old-law reflexes die hard in HR departments.
- The silent clock: stalling payment until your one-year limitation quietly erodes the claim.
What We Do
We recalculate your true entitlement from contract and WPS records — a short exercise with a precise number at the end — then pursue the difference: written demand, MOHRE complaint (free, fast, and where most gratuity disputes end), and labour court where needed, with execution against employer accounts after judgment. Fees are quoted in writing before any engagement.
For Employers
We also audit end-of-service liabilities, structure lawful settlements, and defend inflated claims — both-sides fluency is why our numbers hold up on either side of the table.
Frequently Asked Questions
How is end-of-service gratuity calculated in the UAE?
On basic salary: 21 days per year for the first five years of service, 30 days per year after, capped at two years’ total pay — for employees completing at least one year. Accrued leave and notice are separate additions.
Do I lose gratuity if I resign?
No — under Federal Decree-Law 33/2021, employees who completed a year of service earn gratuity regardless of who ended the contract. Claims of resignation-forfeiture are based on the old law.
Can my employer deduct visa or training costs from my gratuity?
Only deductions with a proper legal basis survive scrutiny — blanket recoupments of visa fees or training costs are among the most commonly rejected. Have any deduction list checked before signing.
My final settlement looks low. What should I do?
Don’t sign under pressure. A recalculation from your contract and WPS records takes us under an hour and produces a precise figure — then a demand or MOHRE complaint pursues the difference. The one-year limitation makes speed matter.
Is gratuity paid on total salary or basic salary?
Basic salary only — which is exactly why artificially deflated ‘basic’ splits are the most common underpayment technique, and why the real-world salary structure can be challenged.
Get your settlement checked: +971 4 427 0845 · WhatsApp us your contract.
Related: unpaid salary claims · wrongful dismissal.