Khulasa (Roman Urdu)
UAE mein gratuity sirf BASIC salary par banti hai, housing aur transport allowance nahi ginte.
Pehle 5 saal har saal 21 din ki basic, uske baad har saal 30 din; kam se kam 1 saal kaam zaroori.
Sign karne se pehle offer letter aur contract mein basic salary check karein, dono ek jaisi hon.
In the UAE, your gratuity (end-of-service pay) is worked out on your basic salary only, not on your full monthly pay. Housing, transport and other allowances raise what you take home each month, but as of 20 October 2026 the private-sector rule counts only the basic part. That is why two people with the same "total salary" can leave the same company with very different gratuity.
What gratuity is, in one line
Gratuity is the money your employer pays you when your job ends. In the UAE private sector you qualify after at least one year of continuous service (as of 20 October 2026). It is not a bonus and not a gift: it is part of your legal end-of-service benefits.
Most workers only meet this number on their last day. By then, the salary structure that decides it was fixed years earlier, on the day they signed.
Basic salary vs total salary
A Gulf offer letter usually has two parts:
- Basic salary: the core wage.
- Allowances: housing, transport, sometimes food or phone.
Added together they make your total pay. Allowances help your monthly budget, but by law they normally do not count towards gratuity. Only the basic salary does.
This is the detail recruiters rarely explain. An offer of AED 5,000 a month can be AED 2,000 basic plus AED 3,000 in allowances. For your rent and groceries it is a 5,000 salary. For your gratuity it is a 2,000 salary.
The 21-day and 30-day rule
For private-sector employees the calculation is simple (as of 20 October 2026, per the UAE Government portal):
- First five years: 21 days of basic wage for each year of service.
- After five years: 30 days of basic wage for each additional year.
- Part years are paid pro rata once you have passed the first full year.
- The total gratuity is capped at two years' wage.
The daily basic wage is commonly taken as the monthly basic divided by 30. Your contract or your employer's settlement may use a slightly different day count, so always ask to see their working.
In numbers
- Minimum service to qualify: 1 year
- Years 1–5: 21 days of basic wage per year
- Year 6 onwards: 30 days of basic wage per year
- Cap: two years' wage in total
- Salary used: basic only, not allowances
Worked example
Take the offer from the video: total pay AED 5,000, of which basic is AED 2,000.
One year of service. Daily basic = 2,000 ÷ 30 = about AED 66.67. One year = 21 days × 66.67 = about AED 1,400. If gratuity were paid on the full 5,000, the same year would be worth about AED 3,500. The gap for a single year is AED 2,100.
Six years of service. The first five years give 5 × 21 = 105 days. The sixth year gives 30 days. That is 135 days of basic wage: 135 × 66.67 = about AED 9,000. On the full salary of 5,000 it would have been about AED 22,500. Over six years the structure of the offer cost this worker roughly AED 13,500 in gratuity, without the monthly salary ever looking different.
You can run your own numbers in the free UAE Gratuity Calculator; it shows every step and the rule it used.
What to check before you sign
The time to fix this is before the contract, not at the exit interview. Ask four things:
- What is my basic salary? Get the number, not "the package".
- Is it written in the offer letter? If the letter only shows a total, ask for the split in writing.
- Does the offer letter match the official contract? The contract registered with the authorities is what counts. Compare the basic salary line by line.
- Is a higher basic possible? Some employers will move money from allowances to basic if you ask before signing. The same total, a much better gratuity.
Some free zones have their own employment rules, so the exact method can differ. The habit is the same everywhere: know your basic salary and get it in writing. A clear, well-structured CV also makes it easier to negotiate from a position of strength; the free CV builder gives you one in a few minutes.
Gratuity is not a small number. For many Gulf workers it is the biggest single payment they will ever receive from an employer. Knowing which salary it is built on, before you sign, is worth more than any monthly allowance. For your own case, check your contract and the official source.
Frequently asked questions
Is UAE gratuity calculated on basic salary or total salary?
On the basic salary only (as of 20 October 2026). Housing, transport and other allowances are not included in the gratuity calculation in the private sector.
How many days of salary do I get per year?
21 days of basic wage for each of the first five years, and 30 days of basic wage for each year after that, with the total capped at two years' wage.
Do I get gratuity if I leave before one year?
No. In the UAE private sector you need at least one year of continuous service to qualify for gratuity.
My offer letter shows only a total salary. What should I do?
Ask for the split between basic salary and allowances in writing, and make sure the basic salary in the offer letter matches the official contract you sign.
Can my employer put most of my pay into allowances?
Many offers are structured that way, which is legal but lowers your gratuity. Before signing, ask whether more of the total can be placed in basic salary.
Do free zones follow the same gratuity rule?
Some free zones have their own employment regulations, so the method can differ. Check your contract and the rules of your specific free zone.
Sources
Rules as of 2026-10-20. Always check your own contract and the official source.