Aqid ERPMeaning
The end-of-service gratuity (مكافأة نهاية الخدمة) is the sum the 2021 Labour Law owes a full-time private-sector employee who completes at least one year of continuous service: 21 days' basic wage for each of the first five years, 30 days' for each year after, parts of a year in proportion, and never more than two years' wage in all.
It is worked on the last basic wage, without housing, transport or other allowances, so the split of the package in the contract decides it. Since the 2021 law it is not cut when the employee resigns. It is paid with the final settlement, less only what the employee owes the employer, and an employer that accrues it monthly carries the liability on its balance sheet as it is earned.
Also called: UAE gratuity · end of service benefit UAE
Example
Seven years of service and a last basic wage of AED 12,000 a month: a day's basic wage is AED 394.52, so the gratuity is 5 × 21 days plus 2 × 30 days, AED 65,095.89, well under the two-year cap of AED 288,000.