How the UAE's 30-Day vs 21-Day Gratuity Bands Actually Work (With Real Numbers)
The rate isn't flat across your whole career — it steps up after year five. Here's exactly how the math combines, with a full worked table.
The rule in one line
Under Federal Decree-Law 33/2021, you earn 21 days of basic salary for each of your first 5 years, and 30 days of basic salary for every year after that — the higher rate only applies to years beyond the fifth, not retroactively to your whole tenure.
Worked table (AED 6,000 basic salary)
Daily wage = 6,000 ÷ 30 = AED 200. Here's how the total builds as tenure increases:
| Years of service | Days earned | Gratuity |
|---|---|---|
| 1 year | 21 | AED 4,200 |
| 3 years | 63 | AED 12,600 |
| 5 years | 105 | AED 21,000 |
| 6 years | 105 + 30 = 135 | AED 27,000 |
| 10 years | 105 + (5×30) = 255 | AED 51,000 |
| 15 years | 105 + (10×30) = 405 | AED 81,000 |
| 20 years | 105 + (15×30) = 555 | AED 111,000 |
Notice the jump between year 5 and year 6: the first 5 years add up in 21-day increments (21,000 total), but year 6 alone adds a full 30-day increment (6,000) — a bigger single-year jump than any of the first five years individually.
When the 2-year cap kicks in
Gratuity is capped at 2 years' total wages — for AED 6,000 basic, that's a ceiling of AED 144,000 (24 × 6,000). Using the same formula, the uncapped total would reach that ceiling at:
105 days (first 5 years) + X years × 30 days × 200/day = 144,000 → X = (144,000 − 21,000) ÷ 6,000 = 20.5 years beyond year 5, i.e. around 25.5 years of total service. Anyone on this basic salary working substantially longer than that will see their gratuity flatten at the cap rather than keep growing — for example, at 40 years' service the uncapped formula would compute 105 + (35×30) = 1,155 days × 200 = AED 231,000, but the actual entitlement is capped at AED 144,000.
Why this matters for your own number
Two people with the same tenure but different basic salaries obviously get different totals — but two people with the same basic salary and different tenures don't scale linearly either, because of the band step-up at year 5 and the eventual cap. The safest way to know your real number is to run it directly.
Use the UAE Gratuity Calculator with your own basic salary and years of service, or get your full payout including leave and notice pay on the UAE Final Settlement Calculator.
Frequently asked questions
Does the 30-day rate apply to my whole tenure once I pass 5 years?
No. The 30-day rate applies only to the years beyond your fifth year of service. Your first 5 years are always calculated at 21 days per year.
At what tenure does the 2-year gratuity cap start to matter?
It depends on your basic salary, but the cap is 2 years' (24 months') total wages. For a fixed basic salary, the exact tenure at which the uncapped formula would exceed that cap can be calculated — for AED 6,000 basic, it's roughly 25–26 years of service.
Is the daily wage always monthly basic ÷ 30?
Yes, for gratuity purposes under Federal Decree-Law 33/2021 — regardless of the actual number of days in the calendar month.
Do partial years count toward the bands?
Yes — service is calculated to the fraction of a year, so partial years contribute a proportional number of days at the applicable band rate.