The Gratuity Rule
Understanding the 21-Day Basis
Why 21 Days?
The most commonly cited "Gratuity Rule" in the UAE is the 21-day rule. This rule states that for the first 5 years of service, an employee earns gratuity equivalent to 21 days of their basic salary for each year.
The Logic
This calculation is meant to approximate roughly one month's salary for every year worked, but slightly discounted for the initial years. After 5 years, the rule shifts to a full 30-day calculation, rewarding long-term loyalty.
The Calculation
(Basic Salary / 30) × 21 × Years
Note: We divide by 30 to get the daily wage, regardless of the actual number of days in the month.