Is end-of-service gratuity mandatory in Dubai?

The years threshold decides not just whether gratuity is owed but which of the two per-year rates applies, and it is measured to the day rather than to the calendar year you started. Service beyond a full year is generally pro-rated rather than ignored, so a contract ended partway through a later year is not treated the same as one ended exactly on an anniversary — ask your employer how the fractional portion is calculated rather than assuming it rounds down to nothing.

Gratuity is not accrued into a fund as you work; it is a liability your employer carries and pays out only at the end of the contract, calculated on the final basic salary rather than an average across your service. That matters if you get a late promotion near the end, because it can lift the whole calculation — and equally, a reduction in basic salary shortly before leaving carries through to the final figure the same way.