UAE Gratuity Law 2025
A plain-English guide to Federal Decree-Law No. (33) of 2021 — the law that governs end-of-service gratuity for all UAE private sector employees. Covers eligibility, formula, 2023 contract reforms, and the rights of all UAE-based workers.
Key Provisions of UAE Gratuity Law
| Provision | Rule Under Decree-Law No. 33/2021 |
|---|---|
| Minimum Eligibility | 1 complete year of continuous service |
| Rate (Years 1–5) | 21 days' basic salary per year |
| Rate (Years 5+) | 30 days' basic salary per year |
| Maximum Cap | 2 years' basic salary (total) |
| Calculation Base | Basic salary only (no allowances) |
| Payment Deadline | 14 days from last working day (Article 53) |
| Contract Types | Limited (fixed-term) only, from Feb 2022 |
| Resignation vs Termination | Equal treatment — same gratuity either way |
Old vs New UAE Labour Law
February 2022 Reform
From February 2, 2022, the UAE stopped issuing unlimited (permanent) employment contracts. All new employment relationships use limited (fixed-term) contracts. This eliminated the old resignation-reduction clauses that cut gratuity by 1/3 or 2/3 for early leavers.| Scenario | Old Law (Unlimited Contract) | New Law (Limited Contract) |
|---|---|---|
| Resign after 1–3 years | 1/3 of gratuity | Full gratuity |
| Resign after 3–5 years | 2/3 of gratuity | Full gratuity |
| Resign after 5+ years | Full gratuity | Full gratuity |
| Terminated by employer | Full gratuity | Full gratuity |
Calculate Under UAE Gratuity Law
Basic salary only — not including allowances
Defaults to today
All new contracts since Feb 2, 2022 are Limited
Enter your salary and service dates to see your gratuity calculation
Frequently Asked Questions
What is the UAE gratuity law?
UAE gratuity is governed by Federal Decree-Law No. (33) of 2021 on the Regulation of Labour Relations in the Private Sector, which replaced Federal Law No. 8 of 1980. This law entitles all employees who complete at least 1 year of continuous service to an end-of-service gratuity based on their basic salary.
What are the UAE gratuity rules in 2025?
The key rules under the 2023 UAE Labour Law: (1) All contracts are now Limited (fixed-term) — no more unlimited contracts for new hires from February 2022. (2) Gratuity is 21 days' basic salary per year for the first 5 years, and 30 days per year thereafter. (3) The maximum gratuity is capped at 2 years' basic salary. (4) Employers must pay all final dues, including gratuity, within 14 days of the last working day.
What changed under the new UAE Labour Law 2023?
The major changes from the 2023 reform: (1) All new contracts are limited (fixed-term) — previously unlimited/permanent contracts created different gratuity reduction rules for resignation. (2) Under limited contracts, resignation and termination are now treated equally — full gratuity applies in both cases. (3) Old unlimited contracts remain valid but must be converted if renewed. (4) Enhanced worker protections including a 9-category list of employment contract types.
Does UAE gratuity law apply to free zone employees?
The UAE Federal Labour Law applies to all private sector mainland employees. Free zone employees are generally also entitled to gratuity based on federal law principles, but specific implementation depends on their free zone authority (e.g., JAFZA, DMCC follow federal law; DIFC and ADGM have separate employment frameworks).
Is there a UAE gratuity law for 1 year of service?
Yes. Federal Decree-Law No. 33 of 2021 grants gratuity to any employee who completes at least 1 continuous year of service. Previously under the old law, if you resigned before completing 5 years, your gratuity was reduced (1/3 for 1-3 years, 2/3 for 3-5 years). Under the new law for limited contracts, you receive full gratuity for your entire period of service from day 1 of year 1.