The short answer
If you have completed at least one continuous year of service, your gratuity is the same whether you hand in your notice or your employer ends your contract. The formula depends only on your basic salary and how long you worked: 21 days of basic pay for each of the first five years and 30 days for each year after that, capped at two years of basic salary.
The reason for leaving is not an input to the calculation. That is a change from the rules before 2022, and it is the main reason people still believe that resigning costs them money.
What the old law said
Before Federal Decree-Law No. 33 of 2021 replaced the older labour law, an employee on an unlimited contract who resigned received only part of the gratuity unless they had served for five years. The reduction depended on how long they had worked.
| Service when resigning | Share of the gratuity |
|---|---|
| Less than 1 year | Nothing |
| 1 to 3 years | One third |
| 3 to 5 years | Two thirds |
| 5 years or more | The full amount |
An employee who was terminated by the employer received the full gratuity at every length of service over one year. The reduction applied only to resignations, which is why resigning could cost thousands of dirhams.
What changed in 2022
The current law, which took effect in February 2022, keeps the same basic formula but removes the reduction for resigning. Several legal summaries of the new rules confirm that resigning and being terminated now give the same gratuity once the one-year minimum is met. If you completed one year, resignation does not lower the amount.
If you joined your employer well before 2022, you may have a period of service that began under the old rules. The calculator on this site applies the current rules to your whole length of service. If you want to know whether any transitional treatment applies to your earlier years, ask your employer’s HR team to show their working or ask the ministry.
A side-by-side example
An employee on a basic salary of AED 9,000 works from 1 March 2022 to 31 August 2024, which is two and a half years. One day of pay is AED 300 and the gratuity is 21 × 300 × 2.5 = AED 15,750.
| Old law, resigning | Current law, resigning | Current law, terminated | |
|---|---|---|---|
| Gratuity | AED 5,250 | AED 15,750 | AED 15,750 |
The old-law figure is one third of the full amount, AED 5,250, shown only to explain why the myth exists. Under the current law the resigning employee receives AED 15,750, the same as someone who was terminated.
Gratuity calculatorPut in your own dates and basic salary to see your figure.Why you still hear the old rule
- Older articles, forum posts and calculators written before 2022 are still easy to find and still rank in search results.
- Some employers and recruiters learned the old rule and keep repeating it.
- Contracts written years ago sometimes copy the old wording.
If an employer tells you that resigning reduces your gratuity, ask which article of the current law says so. A contract can promise more than the law, but it cannot promise less than the statutory minimum.
What still matters when you resign
- The one-year minimum. Resigning before you complete a year of continuous service means no gratuity is due.
- Your notice period. Your contract and the law set how much notice to give, and leaving without it can expose you to a claim for compensation even though the gratuity itself is not reduced.
- Unpaid leave. Days of unpaid leave do not count as service, so check that your employer has counted your dates correctly.
- Deductions. An employer may deduct amounts you lawfully owe, such as an unpaid loan, from your final payment.
- Basic salary. Gratuity is based on basic pay, so a higher allowance does not raise it.
What about dismissal for serious misconduct?
The law lets an employer end a contract without notice for serious misconduct. Legal commentary differs on whether this can cost the employee the gratuity under the current law: some summaries say an employer can no longer withhold it, while others describe only specific deductions that employers are allowed to make. This site does not assume that gratuity is lost in such a case, and its calculator treats every employee who has completed a year in the same way.
If you were dismissed for cause and your gratuity is withheld, take advice from a labour lawyer or raise the matter with the ministry before accepting the decision.
Common questions
If I resign in my second year, do I get gratuity?
Does the reason for leaving change the amount?
Where can I complain if my gratuity is not paid?
Can my contract say I get less if I resign?
Sources
Reviewed on 18 Oct 2026 against the published sources below. Laws and prices change, so check the current position before you rely on a figure.
- Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, Article 51
- Gulf News: Old Labour Law to new, how will my gratuity be affected?
- Gulf News: New UAE Labour Law, how is gratuity calculated?
- Morgan Lewis: United Arab Emirates updates federal labour law
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This guide is general information, not legal, financial or religious advice. Figures are estimates worked out from the sources above and may differ from what applies to you. See the disclaimer. Found a mistake? Tell us.