Resignation Gratuity in the UAE
One of the biggest worries when resigning is "will I lose my gratuity?" Under the current UAE Labour Law formula the answer is reassuring. This page explains exactly how end of service gratuity works after resignation, and why the old reduction rules you may have seen online no longer apply.
Last reviewed: 19 June 2026
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How gratuity works after resignation
Under the current standard private-sector framework, resignation does not reduce your gratuity. If you have completed at least one year of continuous service, you receive the same end of service calculation whether you resign or your employer ends the contract. The amount depends on your basic salary and how long you worked — not on the fact that you chose to leave.
The current UAE gratuity formula
- Daily wage = monthly basic salary ÷ 30.
- First 5 years: 21 days of basic wage per year.
- After 5 years: 30 days of basic wage per year.
- Minimum service: 1 year (less than this means no gratuity).
- Maximum: capped at two years' basic wage.
Why old resignation reductions should not be used
Before the 2022 reforms, the UAE distinguished between "limited" and "unlimited" contracts. Under the old unlimited-contract rules, an employee who resigned could have their gratuity reduced — to one-third for shorter service and two-thirds for medium service. Many online calculators still apply these cuts.
These reductions are outdated
The limited/unlimited distinction was removed when private-sector contracts moved to a single fixed-term model. For current standard private-sector calculations, do not apply one-third or two-thirds resignation reductions. Our calculator uses the current formula and does not reduce gratuity for resignation.
| Approach | Resignation treatment | Use today? |
|---|---|---|
| Current standard formula | No reduction for resignation | Yes |
| Old "unlimited contract" rules | Reduced to 1/3 or 2/3 | No — historical only |
Resigning with less than one year
Eligibility still requires one full year of continuous service. If you resign before completing a year, you are not entitled to end of service gratuity. This is the same threshold that applies to termination.
Basic salary and unpaid leave
Two details often change the final number after resignation:
- Basic salary only — allowances are excluded, so check the basic figure on your contract.
- Unpaid leave — periods of unpaid leave are generally excluded from qualifying service, which slightly lowers the total.
Worked resignation example
An employee resigns after 3 years with a basic salary of AED 8,000:
Resignation example
Under the old unlimited-contract rules this could have been cut by two-thirds to around AED 5,600 — which is exactly why using the outdated method gives the wrong figure today.
See your resignation gratuity estimate
Select "Resignation" as your end type and the calculator applies the current formula with no reduction.
Open the CalculatorCommon employee questions
Official sources & further reading
Confirm details with the UAE Government portal (u.ae) and MOHRE. On this site, read the UAE Labour Law overview, the notice period guide, and the full gratuity guide.