UAE Federal Decree-Law No. 33 of 2021, Article 51 (End of Service Gratuity)
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UAE End of Service Gratuity (EOSB) Guide
UAE Federal Decree-Law No. 33 of 2021, Article 51 (End of Service Gratuity). Employer guide to UAE end-of-service gratuity under Federal Decree-Law No. 33 of 2021 — calculation, eligibility, resignation reductions, and settlement timing.
Part of: UAE HR Compliance Guide
· by ArcHR Compliance Team
By Swajan
Who is entitled to UAE gratuity?
Employees with at least one year of continuous service are entitled to end-of-service gratuity under UAE Federal Decree-Law No. 33 of 2021, calculated on basic salary only unless the MOHRE contract explicitly includes other components in the gratuity base. Employees with less than one year of service are generally not eligible. Gratuity is separate from notice pay and unused leave settlement.
Gratuity calculation formula
For the first five years of service: 21 days of basic salary per year. Beyond five years: 30 days of basic salary per year. Daily rate = (basic salary × 12) ÷ 365. Resignation before five years may reduce entitlement (one-third for 1–3 years, two-thirds for 3–5 years). Termination by employer typically pays full calculated amount.
Settlement and documentation
Pay gratuity with final settlement through WPS where applicable. Issue a settlement letter showing gratuity, notice, and leave components. Keep calculation worksheets and contract copies for MOHRE or labour court disputes. Accrue gratuity liability monthly for finance reporting.
ArcHR EOSB tracking
ArcHR calculates running EOSB liability per employee, updates when basic salary changes, and includes gratuity in termination settlement workflows and payslip history.
Step-by-step workflow
- 1
Verify eligibility
Confirm the employee has at least one year of continuous service and calculate on basic salary only.
- 2
Calculate gratuity
Apply 21 days per year for the first five years and 30 days per year beyond, with resignation reductions if applicable.
- 3
Prepare settlement
Combine gratuity with notice pay and unused leave in the final settlement worksheet.
- 4
Pay through WPS
Transfer the settlement amount through approved WPS channels and issue a bilingual settlement letter.
- 5
Archive records
Keep calculation worksheets, contracts, and payment proof for MOHRE or labour court disputes.
Related tools
Frequently asked questions
Is gratuity paid on basic or total salary?
Article 51 calculates on basic salary unless the contract explicitly includes other components.
Is gratuity paid if an employee resigns?
Yes, if service exceeds one year, but amounts may be reduced for resignation before five years.
When must gratuity be paid?
With final settlement, typically within 14 days of contract end unless otherwise agreed.
Does unlimited contract affect gratuity?
Eligibility and calculation follow Article 51; contract type affects notice rules.
Can gratuity be forfeited?
Only in limited circumstances under labour law — not for routine resignation after qualifying service.
How does ArcHR help?
Running liability reports, settlement calculators, and audit trails per employee.
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