UAE Gratuity & End of Service Benefits
Calculate and provision end-of-service benefits accurately under UAE Labor Law. Handle unlimited contracts, pro-rated entitlements, and ensure timely payment within 14 days of separation.
45-day go-live · 90%+ adoption from week one · No lock-in
EOS Benefits Dashboard
Trusted by UAE businesses
Gratuity Calculation Rates
Gratuity Calculation Rates
| Service Duration | Gratuity Rate | Termination by Employer | Resignation by Employee |
|---|---|---|---|
| Less than 1 year | N/A | No entitlement | No entitlement |
| 1-3 years | 21 days/year | Full entitlement | 1/3 of entitlement |
| 3-5 years | 21 days/year | Full entitlement | 2/3 of entitlement |
| 5+ years (first 5) | 21 days/year | Full entitlement | Full entitlement |
| 5+ years (beyond 5) | 30 days/year | Full entitlement | Full entitlement |
| Maximum cap | 2 years total salary | Capped at 2 years | Capped at 2 years |
UAE EOS Calculation Example
Employee with 7 years of service, basic salary AED 10,000/month, terminated by employer
Gratuity is calculated on basic salary only (excludes housing, transport, and other allowances). For resignations with less than 5 years of service, pro-ration applies: 1/3 for 1-3 years, 2/3 for 3-5 years.
EOS Payment Deadlines & Obligations
EOS Payment Deadlines & Obligations
| Event | Deadline | Calculation Basis | Penalty for Delay |
|---|---|---|---|
| Final settlement payment | Within 14 days of last working day | Last drawn basic salary | Employee can file complaint with MOHRE |
| EOS for unlimited contracts | Within 14 days of termination date | Basic salary only | Court-ordered interest on delayed amount |
| Monthly EOS provisioning | Monthly accrual recommended | Current basic salary | Financial reporting risk (IFRS/IAS 19) |
| Annual EOS liability audit | End of financial year | Actuarial valuation for large employers | Audit qualification risk |
Understanding UAE End of Service Benefits
EOS Under Unlimited Contracts
Since the implementation of Federal Decree-Law No. 33 of 2021 (effective February 2, 2022), all employment contracts in the UAE must be limited-term (fixed-term) contracts with a maximum duration of three years, renewable. Existing unlimited contracts were required to be converted by February 2, 2023. The gratuity calculation formula remains the same regardless of contract type: 21 days of basic salary per year for the first five years and 30 days per year thereafter.
Resignation vs Termination Entitlements
When an employer terminates the contract, the employee receives full gratuity entitlement based on service length. When an employee resigns: with less than one year of service, no gratuity is due; between one and three years, the employee receives one-third of the calculated amount; between three and five years, two-thirds; and after five or more years, the full entitlement. These pro-ration rules apply to resignation cases only.
Components Included in EOS Calculation
UAE gratuity is calculated exclusively on the last drawn basic salary. Housing allowance, transport allowance, commission, bonuses, overtime pay, and any other benefits are excluded from the calculation. The daily rate for calculation purposes is determined by dividing the monthly basic salary by 30 (calendar days).
Maximum Gratuity Cap
The total gratuity payable is capped at two years' total remuneration (not just basic salary). This cap serves as an absolute ceiling regardless of how long the employee has served. For very long-serving employees, this cap can significantly reduce the otherwise calculated amount.
EOS Calculation Process with Kiework
Service Period Calculation
Determine the employee's total continuous service period, accounting for unpaid leave, probation, and contract type transitions.
Kiework automatically tracks service start date, leave without pay periods, and calculates net service days with precision.
Gratuity Entitlement Calculation
Apply the correct formula based on service length (21 days for first 5 years, 30 days thereafter) and separation type (resignation vs termination).
Built-in calculator applies correct rates, pro-ration factors, and resignation deductions automatically.
Final Settlement Preparation
Compile all pending amounts including gratuity, leave encashment, salary arrears, repatriation ticket, and any deductions.
One-click final settlement with all components auto-calculated, deduction summary, and payment breakdown.
Payment & Documentation
Process payment within 14 days, generate experience certificate, and update MOHRE records.
Automated payment scheduling, document generation, and MOHRE cancellation workflow integration.
Gratuity / EOS FAQ
Related Tools & Resources
EOS Processing: Manual vs Kiework
Average metrics per employee separation
More Compliance Guides
Provident Fund (PF)
EPF contribution rates, ECR filing, and EDLI compliance
ESI
Employee State Insurance rates, benefits, and filing
Professional Tax
State-wise PT slabs and monthly deductions
TDS / Form 16
Tax deduction at source and Form 16 generation
Gratuity
Payment of Gratuity Act calculations and eligibility
Labor Welfare Fund
State-wise LWF contribution rates and deadlines
Shops & Establishments
State registration, work hours, and leave rules
POSH Act
Prevention of Sexual Harassment compliance
Bonus Act
Statutory bonus calculations and eligibility criteria
Labor Codes 2026
New wage, social security, and OSH code compliance
WPS
Wage Protection System and SIF file generation
MOHRE Labor Law
Ministry of Human Resources and Emiratisation regulations
DEWS Pension
DIFC Employee Workplace Savings scheme
Emiratisation
Nafis quotas and Emirati hiring requirements
GOSI
General Organization for Social Insurance contributions
Nitaqat
Saudization quotas and Nitaqat tier management
WPS (Mudad)
Wage Protection System via Mudad portal
End of Service
Saudi end-of-service benefit calculations
Labor Law (Qiwa)
MHRSD regulations and Qiwa portal compliance
Automate Gratuity / EOS Compliance
Stop managing Gratuity / End of Service Benefits (EOS) manually. Kiework automates calculations, filing deadlines, and compliance validation — so you never miss a deadline.