Terminated after eight years on a 25,000 AED package
A longer-service case where the 30-day band applies, the package split does most of the damage, and a separate claim for arbitrary dismissal may sit alongside the gratuity.
The facts
- Operations manager, Abu Dhabi, private company under the federal law
- Started 15 January 2018, terminated by the employer with 60 days' notice, last working day 15 March 2026
- Package 25,000 AED: basic 10,000, housing 9,000, transport 3,000, schooling 3,000
- No unpaid leave
- Promoted twice; basic rose from 6,500 to 10,000 over the period
Step 1 — service period
15 January 2018 to 15 March 2026 is 2,981 days, or 8.167 years. Nothing to deduct.
Step 2 — which basic wage
The final basic wage, 10,000 AED, applies to the entire period — including the years when it was 6,500. Promotions work in your favour here, and the calculation is not done year by year.
10,000 ÷ 30 = 333.33 AED per day
Step 3 — both bands
Over five years, so the entitlement splits:
- First five years: 5 × 21 = 105 days
- Remaining 3.167 years: 3.167 × 30 = 95 days
- Total 200 days × 333.33 = 66,667 AED
That is 6.67 months of basic wage — but only 2.67 months of the 25,000 package.
Basic is 40% of this package. Had the same 25,000 been structured with a 15,000 basic, the gratuity would be 100,000 AED rather than 66,667 — a difference of 33,333 AED on identical work and identical total pay. Nothing can be done about it at the end. It is a negotiation at the offer stage, and almost nobody treats it as one.
The rest of the settlement
| Item | Amount | Basis |
|---|---|---|
| End-of-service gratuity | 66,667 | 200 days at basic wage |
| Untaken annual leave | by days accrued | Paid at basic wage, 333.33 per day |
| Notice | — | Worked, so nothing due in lieu |
| Repatriation air fare | per contract | Commonly payable where the employer ends the contract |
| Arbitrary dismissal compensation | up to 3 months' wage | A separate claim, only if the dismissal was unlawful |
Arbitrary dismissal is a separate question
Gratuity is payable whether or not a termination was justified — it is earned by service, not conditional on good behaviour. Where a dismissal is found to be arbitrary, compensation of up to three months' wage may be awarded in addition.
An employer occasionally presents the two as a trade: accept a reduced gratuity and no dispute. They are legally distinct, and a reduced gratuity is not a concession the employer has the right to offer.
What about the two-year cap?
Not reached here. The ceiling is 24 months of wage, which at this basic is 240,000 AED — equivalent to 720 days of entitlement, or around 25 years and 6 months of service. At 200 days this case is well inside it.
Run your own version
The calculator handles both bands automatically and flags the cap if your service reaches it.
Figures are for the case described and reviewed 2026-09-19. General guidance, not legal advice — see the disclaimer.