UAE Gratuity Formula
📌First 5 years: 21 days basic/year
📌After 5 years: 30 days basic/year
📌Max: 2 years total basic salary
📌Basic salary only (not allowances)
Calculate your End of Service Benefit in UAE/Dubai as per UAE Labour Law Federal Decree No. 33 of 2021.
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Under UAE Labour Law (Federal Decree No. 33 of 2021): For the first 5 years of service, you get 21 working days of basic salary per year. For each year beyond 5 years, you get 30 days of basic salary. The total gratuity cannot exceed 2 years' basic salary. Example: 8 years at AED 8,000 basic = (5 × 21 days × 8000/30) + (3 × 30 days × 8000/30) = AED 28,000 + AED 24,000 = AED 52,000.
Yes. Under the 2021 UAE Labour Law, employees who resign are entitled to full end of service gratuity after completing at least 1 year. The old law reduced gratuity for resigners under 5 years, but the new law equalizes it — you get full gratuity regardless of whether you resigned or were terminated (except in cases of Article 44 gross misconduct).
UAE gratuity received by an NRI is generally not taxable in India when received, as it is foreign-source income. If you are a Resident Indian for that tax year, foreign income becomes taxable. Most UAE expats returning to India should check their residency status carefully. Transfer the gratuity to your NRE account before returning to India for the cleanest tax treatment. Consult a CA for your specific situation.
Federal Decree Law No. 33 of 2021 brought major changes: (1) Equal gratuity for resignation and termination, (2) New contract types — limited and unlimited abolished in favor of fixed-term contracts of max 3 years (renewable), (3) New leave categories including parental leave, (4) Anti-discrimination provisions, (5) Remote work frameworks. Gratuity is still calculated on basic salary only, but the formula now favors employees over the old law.
Companies in DIFC (Dubai International Financial Centre) follow a separate DIFC Employment Law which has a different gratuity scheme — employees contribute to the DIFC Employee Workplace Savings (DEWS) plan. Some mainland UAE companies also voluntarily adopt this scheme. Under DEWS, companies make monthly contributions equivalent to gratuity accrual to a fund managed by Zurich International or similar. This protects workers even if the company goes bankrupt.