Unlimited Contract Gratuity Calculator (Pre-2022 Rules)

Worked in the UAE on an unlimited contract signed before February 2022? The old Federal Law No. 8 of 1980 treated resignation very differently from termination – and those legacy rules can still matter when employers calculate gratuity for service completed under the old regime. This calculator handles both the legacy reductions and the current law.

Unlimited Contract Gratuity Calculator (Pre-2022) Last verified: 6 Jul 2026
Sources: Federal Law No. 8 of 1980 (legacy rules) · Federal Decree-Law No. 33 of 2021 · MOHRE
Frequently asked questions
What was an unlimited contract in the UAE?
Before February 2022, UAE employment contracts came in two types: limited (fixed-term) and unlimited (open-ended). Federal Decree-Law No. 33 of 2021 abolished unlimited contracts - all contracts had to convert to fixed-term. The old rules still matter when calculating gratuity for service periods completed under the old law.
How did resignation reduce gratuity on unlimited contracts?
Under the old Federal Law No. 8 of 1980, an employee who resigned from an unlimited contract received 1/3 of the gratuity with 1-3 years of service and 2/3 with 3-5 years. Only after 5 years did resignation earn the full amount. Termination by the employer always paid in full.
My contract converted to fixed-term - which rules apply to me?
In practice, most employers calculate the full period under the current law, which is more generous on resignation. Some apply old rules to pre-2022 service and new rules afterwards. If your employer applies a reduction you disagree with, MOHRE (80060) can adjudicate.

The old resignation penalty explained

On unlimited contracts under the 1980 law, an employee who resigned received a reduced gratuity: one third of the accrued amount with 1 to 3 years of service, two thirds with 3 to 5 years, and the full amount only after 5 years. If the employer terminated the contract, gratuity was always paid in full. This asymmetry is why “resign or wait to be terminated” was such a common dilemma before 2022.

What changed in February 2022

Federal Decree-Law No. 33 of 2021 abolished unlimited contracts entirely – every contract converted to fixed-term – and removed the resignation penalty. For service after the conversion, full gratuity applies regardless of how the employment ends. Calculate that portion with the main UAE gratuity calculator.

Which rules does your employer apply?

Practice varies. Many employers simply apply the current, more generous law to the entire service period. Some split the calculation: legacy rules for pre-2022 service, new rules after. The law’s transition provisions favour the employee reading in most cases – if your employer applies a reduction you believe is wrong, raise it with MOHRE on 80060 before signing your final settlement. See also the resignation gratuity calculator for scenario comparisons.

Estimates for information only, not legal advice.