What every UAE HR manager should know about EOSB in 2026

End-of-service benefits (EOSB) are among the most frequently miscalculated figures on UAE payrolls. Here's how to get them right every time — and where teams usually slip up.

What governs EOSB?

UAE private-sector gratuity is governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations. The headline rule is simple in principle, but the details — the wage basis, resignation reductions and caps — are what trip teams up.

The core rule

For employees who have completed at least one year of continuous service:

• 21 days of basic wage for each of the first five years of service.
• 30 days of basic wage for each year beyond the fifth.
• Total gratuity may not exceed two years' (24 months') basic wage.

"The rule of thumb: divide basic wage by 30 to get the daily wage, then multiply by the entitlement days for each year of service."

A worked example

Take an employee with a monthly basic wage of AED 6,500 who has completed 6.4 years of service, ending on contract completion:

• Daily wage = 6,500 ÷ 30 = AED 216.67.
• First 5 years = 5 × 21 days = 105 days.
• Next 1.4 years = 1.4 × 30 days = 42 days.
• Total = 147 days × 216.67 ≈ AED 31,850.

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Let the system handle it

In Emirates HRM, EOSB is computed automatically from basic wage, years of service and the leaving reason, with a transparent breakdown you can review before approval and payment — and support for the UAE plus five other GCC countries.

Try the live calculator to see the same logic that's built into the product.