The service period: what counts

Gratuity is earned by continuous service. Working out exactly how long that ran, and what interrupted it, changes the figure more often than the formula does.

The one-year threshold

No gratuity is payable below one year of continuous service. This is absolute — it does not matter how the employment ended, and there is no pro-rated entitlement for eleven months.

Past one year, everything is pro rata. Three years and four months earns exactly 3.33 years' worth. Service is not rounded down to whole years, and any calculator that does so is understating the figure.

What counts towards service

Period	Counts?	Note
Normal working days	Yes	Obviously
Paid annual leave	Yes	Including leave taken immediately before leaving
Paid sick leave	Yes	Within the statutory entitlement
Public holidays and weekends	Yes	Service is counted in calendar days
Probation period	Yes	Counts in full towards the total, once you pass one year
Maternity leave	Yes	Statutory maternity leave does not break service
Notice period, worked	Yes	Service runs to the last working day
Unpaid leave	No	Days of absence without pay are excluded
Unauthorised absence	No	Excluded, and may have other consequences

Unpaid leave: the deduction people forget

Days taken without pay come off the service period. Two months of unpaid leave across a career is roughly 60 days — on a 10,000 AED basic at more than five years' service, that is around 2,000 AED of gratuity.

It is worth adding up before you accept a settlement figure, because the employer's payroll system will have the exact number and you may not. Ask for the record.

What breaks continuity

Continuity is what makes the years add up. It is generally preserved through leave, sickness and internal transfers. It is at risk where:

You resigned and were later rehired. A genuine break usually restarts the clock, and the earlier period may not carry forward.
You moved between group companies. Whether service transfers depends on how the move was documented. Get written confirmation that prior service is recognised — before the move, not after.
Your employer changed its legal identity. Where a business is transferred, employees' accrued rights generally carry over to the successor, but the paperwork matters.

Before you accept a transfer

Moving to a sister company with "the same terms" can quietly reset your service to zero. If you have four years accrued and move at the wrong moment, you can lose the lot and start again from under the one-year threshold. Ask for the continuity of service to be stated in writing in the new contract.

When service ends

On your last working day — the end of the notice period, whether you worked it or were paid in lieu. Not the day you were told, and not the day the visa was cancelled. Where the two differ, the contract end date recorded with MOHRE is the reference point, and any disagreement about it is worth resolving before signing the settlement.

Everything owed to you must be paid within 14 days of that date.

Questions

Does my probation count?

Yes, towards the total service period. It does not create a separate entitlement, and if you leave during probation you are below one year and no gratuity arises.

I took three months of unpaid leave for a family matter. What does it cost me?

Roughly 90 days off the service period. At more than five years' service on a 10,000 AED basic, about 3,000 AED. Enter the days in the calculator and it will show the difference.

I worked for the same group but three different entities. Do the years combine?

Only if the transfers preserved continuity of service, which turns on how each move was documented. If nothing was recorded, expect the employer to treat each entity separately. This is worth taking advice on, particularly if the total across entities is substantial.

Does maternity leave reduce my service?

Statutory maternity leave does not break continuity of service.

Reviewed 2026-09-19 against Federal Decree-Law No. 33 of 2021. General guidance, not legal advice — see the disclaimer.