Question 1

How is gratuity calculated under UAE Federal Decree-Law No. 33 of 2021?

Accepted Answer

Under the current UAE Labor Law, employees completing at least one continuous year of service receive 21 days' basic salary for each year of the first five years, plus 30 days' basic salary for each year thereafter. The total entitlement is legally capped at 2 years' (24 months) basic salary.

Question 2

Is there a difference in gratuity between resignation and termination?

Accepted Answer

No. Under Federal Decree-Law No. 33 of 2021, all employment contracts are standardized as fixed-term (limited) contracts. Unlike the repealed 1980 law, employees who resign after completing one continuous year receive 100% of their statutory gratuity without deduction.

Question 3

Which component of salary is used to calculate End of Service Benefits?

Accepted Answer

Only the employee's last basic monthly salary is used. Housing allowances, transport, telephone, overtime, bonuses, and commissions are strictly excluded from the statutory gratuity wage base.

Question 4

What is the Alternative Voluntary End-of-Service Savings Scheme?

Accepted Answer

Introduced via UAE Cabinet Decision No. 96 of 2023, employers can opt to invest monthly contributions (5.83% for <5 years service, 8.33% for >5 years) into SCA-regulated investment funds (such as DEWS or national savings schemes) instead of a lump-sum balance sheet accrual.

Question 5

How does CohortaOS automate UAE EOSB and WPS payroll?

Accepted Answer

CohortaOS automatically provisions real-time statutory gratuity reserves on the corporate general ledger, generates compliant C3/WPS SIF files, and calculates exact proration to the exact day upon employee offboarding.

UAE End of Service Benefits (EOSB) Gratuity Calculator

Statutory Calculation Breakdown

Frequently Asked Questions: UAE Gratuity & Labor Law