Compliance

What every UAE HR manager should know about EOSB in 2026

LN Layla Al Nuaimi · Mar 12, 2026 · 8 min read

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.

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.