Gratuity Calculator UAE
Estimate your UAE end-of-service benefit instantly. Based on current UAE Labour Law (Federal Decree-Law No. 33 of 2021). Transparent formula. Year-by-year breakdown.
Gratuity Calculator UAE
Free · Instant · Based on Federal Decree-Law No. 33 of 2021
How UAE Gratuity Is Calculated
UAE end-of-service gratuity is governed by Federal Decree-Law No. 33 of 2021. Here is the general framework for private-sector workers.
The Standard Formula
Gratuity is calculated using your last basic monthly salary — not your total salary or gross pay. Allowances such as housing and transport are excluded.
- Calculate your daily wage
Monthly basic salary ÷ 30 = Daily wage - First 5 years of service
Daily wage × 21 days × years served (up to 5) - Service beyond 5 years
Daily wage × 30 days × additional years - Add partial years proportionally
Partial year = daily wage × rate × (days/365) - Apply the maximum cap
Total cannot exceed 2 years' basic wage
Monthly basic salary: AED 10,000
Service: 7 complete years
Below the 2-year cap (AED 240,000). Result is full calculated amount.
UAE Gratuity Eligibility
You must have completed at least one full year of continuous eligible service to qualify for the standard gratuity calculation under the general framework.
Gratuity uses your last basic monthly salary only — not gross salary, housing allowance, or transport allowance.
Under the current UAE Labour Law, employees who resign and meet the minimum service threshold are generally entitled to gratuity. Learn more →
This calculator covers the general UAE private-sector framework. Free-zone workers, domestic workers, and other categories may have separate rules.
The rate increases from 21 days/year to 30 days/year once you complete 5 years of service. Partial years are calculated proportionally.
Total gratuity cannot exceed the equivalent of 2 years' basic wageunder the standard framework, regardless of total service length.
Gratuity Rate by Year of Service
The rate changes after 5 complete years. Here is how gratuity accumulates per year for an employee earning AED 10,000 basic salary per month (daily wage = AED 333.33):
| Year | Rate | Gratuity (AED 10,000/mo salary) | Running Total |
|---|---|---|---|
| Year 1 | 21 days/yr | AED 7,000 | AED 7,000 |
| Year 2 | 21 days/yr | AED 7,000 | AED 14,000 |
| Year 3 | 21 days/yr | AED 7,000 | AED 21,000 |
| Year 4 | 21 days/yr | AED 7,000 | AED 28,000 |
| Year 5 | 21 days/yr | AED 7,000 | AED 35,000 |
| Year 6 | 30 days/yr | AED 10,000 | AED 45,000 |
| Year 7 | 30 days/yr | AED 10,000 | AED 55,000 |
| Year 8 | 30 days/yr | AED 10,000 | AED 65,000 |
| Cap (2 years' wage) | AED 240,000 max | ||
Example uses AED 10,000 basic salary. Daily wage = 10,000 ÷ 30 = AED 333.33. Per-year amount = daily wage × rate. Partial years calculated proportionally.
Gratuity Calculators UAE
Latest Legal Updates
Recent changes to UAE labour law and gratuity rules, with official sources.
The current UAE private-sector gratuity framework continues to operate under Federal Decree-Law No. 33 of 2021 and its implementing resolutions. The standard calculation remains: 21 days' basic wage per year for the first 5 years, and 30 days' basic wage per year for service beyond 5 years, subject to the applicable statutory maximum. Workers and employers should consult MOHRE for guidance on their specific circumstances.
- Standard gratuity calculation (21 days / 30 days framework)
- Basic wage definition
- Eligibility thresholds
The UAE Cabinet approved a voluntary End-of-Service Savings Scheme as an alternative to traditional end-of-service gratuity for eligible private-sector workers. Under this scheme, employers contribute to investment funds on behalf of enrolled employees. This scheme is separate from and operates independently of the standard gratuity framework. Employees enrolled in the scheme have their end-of-service benefits handled through the scheme rather than the traditional calculation.
- Optional End-of-Service Savings Scheme
- Employer contribution obligations for enrolled employees
The new UAE Labour Law (Federal Decree-Law No. 33 of 2021) came into force, replacing Federal Law No. 8 of 1980. The new law introduced significant changes including the elimination of the limited/unlimited contract distinction for private-sector workers under the standard framework, new work models, and updated end-of-service benefit rules. The standard gratuity calculation framework (21 days for the first 5 years, 30 days thereafter) remains as the general benchmark under Article 51.
- Contract type terminology (limited vs unlimited)
- Work models (full-time, part-time, flexible, remote, temporary, shared)
- Gratuity calculation framework
- End-of-service benefits
Frequently Asked Questions
What is UAE gratuity (end-of-service benefit)?
UAE gratuity, also called an end-of-service benefit (EOSB), is a lump-sum payment that eligible private-sector employees receive when their employment ends. It is calculated based on the employee's basic wage and length of continuous service. The legal basis is Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, primarily Article 51.
Is gratuity mandatory in the UAE?
Yes. Under UAE Labour Law, qualifying private-sector employees are entitled to end-of-service gratuity. Employers are legally required to pay it upon termination of a qualifying employment relationship. It is not voluntary — it is a statutory entitlement.
Is gratuity mandatory in salary?
Gratuity is not included in your monthly salary. It is an end-of-service payment made when employment ends, provided the eligibility threshold is met. Some employers may structure total compensation packages that reference gratuity, but the statutory entitlement itself is paid at the end of the employment relationship.
What is end-of-service benefit?
End-of-service benefit (EOSB) is the formal term used in UAE law for what is commonly called gratuity. It is a payment made to eligible employees when their employment ends, calculated on the basis of their last basic wage and total years of continuous eligible service. The final settlement an employee receives may also include other components such as unpaid salary, accrued annual leave, and notice-related amounts.
What is the maximum gratuity amount?
Under the standard UAE private-sector framework, total gratuity shall not exceed the equivalent of two years' basic wage. This means if the calculated gratuity based on days and daily wage exceeds two years of basic salary, it is capped at that amount. Use our calculator to see whether the cap applies to your situation.
Is there any maximum limit for gratuity?
Yes. Under the standard UAE framework, the maximum gratuity is capped at the equivalent of two years' basic wage. For example, if your monthly basic salary is AED 10,000, your annual basic wage is AED 120,000, and the maximum gratuity cap is AED 240,000. Individual circumstances and applicable regimes may affect this.
Can I get my gratuity in advance in the UAE?
Generally, UAE gratuity is payable upon the termination of the employment relationship. Advance payment of gratuity is not a standard provision under the general UAE Labour Law framework. Some employers may have separate arrangements, but these should be reviewed carefully. Contact MOHRE or a qualified UAE employment lawyer for guidance on your specific situation.
How can I check my gratuity online?
You can estimate your gratuity using our free calculator on this website. For official verification, you can contact MOHRE (Ministry of Human Resources and Emiratisation) through the MOHRE website at mohre.gov.ae, their smart services platform, or their call centre. Your employer is also required to provide a clear account of end-of-service entitlements.
Can gratuity be waived?
UAE Labour Law generally protects employee rights and does not allow waiver of statutory entitlements through contractual provisions that are less favourable than the law. An employee cannot be made to sign away their legal gratuity entitlement. If you believe your employer is improperly withholding gratuity, you should contact MOHRE.
Can part-time employees receive gratuity?
Part-time workers and other flexible work models are recognised under Federal Decree-Law No. 33 of 2021. However, the gratuity calculation for part-time and other non-standard work models may differ from the standard full-time calculation. Specific rules apply based on the work model and contract. Verify your specific entitlement with MOHRE or a legal professional.
Understanding UAE End-of-Service Gratuity
End-of-service gratuity is one of the most important financial entitlements for workers in the UAE. Yet many employees reach the end of their employment without a clear understanding of how the amount is determined, what affects it, or how to verify whether their employer's calculation is correct. This guide explains everything you need to know.
What Is UAE Gratuity?
UAE gratuity — formally called the end-of-service benefit — is a lump-sum payment that a private-sector employer must pay to an eligible employee when their employment ends. It is not a bonus or a discretionary payment. It is a statutory entitlement under Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, which replaced the previous Federal Law No. 8 of 1980.
The law applies to the overwhelming majority of private-sector employment relationships in the UAE mainland. It does not automatically apply to employees working under separate frameworks such as the Dubai International Financial Centre (DIFC), Abu Dhabi Global Market (ADGM), or certain free zones that have their own employment regulations.
Why Basic Salary Matters — Not Total Salary
One of the most common and costly mistakes employees make when estimating their gratuity is using their total monthly salary rather than their basic salary. The distinction is significant because UAE employment packages frequently include several components beyond the basic wage:
- Housing allowance — often 20–30% of total pay
- Transport allowance — typically AED 500–2,000 per month
- Telephone or communication allowance
- Education allowance for dependants
- Performance bonuses — usually excluded unless contractually specified
- Sales commissions — generally excluded from the gratuity base
Under Article 51 of the current law, the gratuity calculation uses the last due basic wage. If your employment contract specifies a basic salary of AED 8,000 and you receive a further AED 4,000 in housing and transport allowances, your gratuity is calculated on AED 8,000 — not AED 12,000. Entering the wrong figure into any calculator, including this one, will produce an incorrect estimate.
Basic salary = AED 9,000 | Allowances = AED 6,000
Correct gratuity base → AED 9,000
Incorrect gratuity base → AED 15,000 (overstates by 67%)
How the 5-Year Threshold Changes Your Calculation
The UAE gratuity formula has two distinct rates depending on how long you have worked for the same employer. For the first five years of continuous service, you accumulate gratuity at a rate of 21 days of basic wage per year. Once you cross the five-year mark, every additional year earns you 30 days of basic wage — a 43% increase in the daily rate applied to those extra years.
This threshold creates a meaningful financial incentive to complete five years with a single employer. Consider two employees both earning AED 12,000 basic salary per month:
| Scenario | Years Served | Gratuity Amount | Difference |
|---|---|---|---|
| Employee A | 4 years 11 months | AED 34,067 | — |
| Employee B | 5 years 1 month | AED 36,333 | +AED 2,267 |
| Employee C | 6 years | AED 47,200 | +AED 13,133 vs A |
Based on AED 12,000 basic salary. Partial years calculated proportionally.
Unpaid Leave and Its Effect on Gratuity
Many employees are unaware that unpaid leave — including extended unpaid personal leave, certain types of unauthorised absence, and some maternity or parental leave arrangements — can reduce the qualifying service period used for the gratuity calculation. Under the federal framework, only continuous qualifying service counts toward the gratuity base.
This does not mean that taking any unpaid leave automatically reduces your gratuity. The specific impact depends on how the leave was classified in your employment record and what the employment contract or applicable regulations say about it. However, employees who have taken extended unpaid absences should not assume that every calendar day between their joining date and end date is qualifying service.
The Two-Year Wage Cap Explained
The UAE Labour Law places an upper limit on the total end-of-service gratuity that can be paid: the amount must not exceed the equivalent of two years' basic wage. For most employees this cap will never be reached, because it only becomes relevant after approximately 28–29 years of continuous service with the same employer at the same salary level.
However, for long-serving employees or those who have received salary increases over time, the calculation requires care. The cap applies to the final calculated figure, not to each year separately. Our calculator applies this cap automatically and shows you when and how it affects your result.
Gratuity in Different Employment Scenarios
The same formula applies differently depending on how and why your employment ends, and what type of contract you hold.
Gratuity When You Resign
Under Federal Decree-Law No. 33 of 2021, an employee who resigns after completing one year of qualifying service is entitled to end-of-service gratuity. This is a significant change from the previous law, which reduced gratuity entitlement for employees who resigned before completing five years of service.
The current framework does not distinguish between resignation and termination for the purposes of the gratuity formula itself — both result in the same calculation using the last basic wage and the qualifying service period. What may differ is the notice period obligation and any contractual provisions that apply specifically to voluntary resignation.
Gratuity After Resignation — Full Guide →Gratuity When You Are Terminated
Termination by the employer — whether for operational reasons, restructuring, or other grounds permitted under the law — generally triggers the same gratuity entitlement. The employer must pay the calculated end-of-service benefit as part of the final settlement, which under current rules should be settled within 14 days of the contract end date.
Where termination is found to be arbitrary or unlawful, additional compensation may also be owed beyond the standard gratuity amount. That compensation is separate from the end-of-service gratuity and is not calculated by a standard formula — it is determined by reference to the circumstances of each case.
Gratuity After Termination — Full Guide →Fixed-Term vs Unlimited Contracts
Under the previous UAE Labour Law, there was an important distinction between limited (fixed-term) and unlimited contracts that affected gratuity. Federal Decree-Law No. 33 of 2021 introduced a requirement for all employment contracts to be converted to fixed-term contracts, with a maximum initial term of three years (renewable).
The practical impact on gratuity calculation under the current framework is that the same formula applies to all full-time private-sector contracts. The key variable is the length of qualifying service and the basic wage — not the contract type. Employers were required to update existing unlimited contracts to the new fixed-term format.
Part-Time and Flexible Work Arrangements
Federal Decree-Law No. 33 of 2021 introduced formal recognition of part-time, remote, temporary, and flexible work arrangements. Workers under these arrangements may have different gratuity entitlements compared to full-time employees, and the standard 21-day/30-day formula may not apply directly.
If you work under a part-time or flexible arrangement, you should verify the applicable gratuity rules for your specific work pattern rather than assuming the standard calculator result applies to your situation. The Ministry of Human Resources and Emiratisation (MOHRE) provides guidance on these arrangements through its official channels.
Gratuity Disputes: What To Do If Your Amount Is Wrong
Disagreements between employees and employers about the correct gratuity amount are one of the most common labour disputes in the UAE. Understanding the most frequent errors — and what steps to take when you believe your calculation is incorrect — can save significant time and stress.
Most Common Employer Calculation Errors
- Using total salary instead of basic salary — This understates or (less commonly) overstates the gratuity base depending on how the salary components are structured.
- Incorrect joining date — A difference of even a few months in the recorded start date can meaningfully affect the qualifying service period, particularly near the 1-year and 5-year thresholds.
- Applying old law rules — Some employers still calculate gratuity using the previous law's resignation deductions, which no longer apply under the current framework for most employees.
- Ignoring partial years — Rounding down to the nearest complete year instead of calculating partial years proportionally reduces the employee's entitlement.
- Incorrect unpaid leave deduction — Deducting more qualifying service than the law permits based on the type of leave taken.
- Applying the two-year cap incorrectly — The cap applies to the total calculated amount, not year by year.
Steps to Take If You Disagree With Your Gratuity
- Calculate independently first — Use this calculator and keep a record of the inputs (joining date, end date, basic salary) and the output.
- Request a written breakdown — Ask your employer or HR department for a written explanation of how your gratuity was calculated, including the figures used.
- Compare and identify the discrepancy — Determine exactly where the difference arises: is it the salary base, the service period, or the formula itself?
- Raise it internally first — Many genuine errors are resolved through a straightforward conversation with HR or payroll.
- File a complaint with MOHRE — If internal resolution fails, eligible employees can raise a labour complaint through the MOHRE Tasheel platform or the Ministry's official channels. MOHRE provides a mediation stage before cases proceed further.
- Escalate to the Labour Court if necessary — Unresolved disputes can be referred to the UAE Labour Court, which handles end-of-service benefit claims.
Planning Around Your UAE Gratuity
Gratuity is not just a payment you receive at the end of employment — it is a financial asset that grows throughout your career. Understanding how it accumulates can help you make better decisions about job changes, contract renewals, and financial planning.
The Real Cost of Changing Jobs Before 5 Years
Every time you change employer, your gratuity clock resets to zero with the new employer. This means an employee who changes jobs every three years, for example, will accumulate gratuity at the 21-day rate for their entire career and never benefit from the higher 30-day rate that applies after five years with a single employer.
This does not mean staying in a poorly-suited role solely for gratuity purposes — other financial and career factors matter more. But it is worth quantifying what you stand to gain or lose in gratuity terms before accepting a new offer, particularly if you are within one or two years of the five-year threshold.
Salary Increases and Gratuity
Gratuity is calculated using your last due basic salary — not an average of salaries received over your employment. This means that salary increases throughout your career do not retroactively increase your gratuity for earlier years: they only affect the calculation going forward from the date of the increase.
In practical terms, this means the timing of a salary increase relative to your end date can significantly affect your gratuity. An increase that takes effect shortly before your employment ends will be reflected in the full calculation. An increase offered after your notice period begins should still be reflected if it forms part of your last due basic wage.
Alternative End-of-Service Schemes
The UAE has introduced an optional alternative end-of-service savings scheme for private-sector workers, administered through regulated investment funds. Under this scheme, employers can make monthly contributions to a savings account on behalf of employees, and the employee receives the accumulated fund at the end of their employment instead of the traditional gratuity calculation.
This scheme was introduced to provide employees with greater financial security and the ability to grow their end-of-service benefit through investment returns. Participation is voluntary for employers (who opt in) and the scheme operates alongside the traditional gratuity framework for employers who have not adopted it. If your employer participates in the alternative scheme, your end-of-service calculation will differ from the standard formula shown in this calculator.
Gratuity and Taxation
The UAE does not impose personal income tax on employment income, including end-of-service gratuity payments received in the UAE. For employees who are residents of other countries, their home country's tax rules may apply to the gratuity received — particularly if funds are remitted to a country that taxes overseas income. This is a complex area that depends on individual tax residency and the tax laws of the relevant jurisdiction.
Gratuity in UAE Free Zones
The UAE has more than 40 free zones, each established by specific federal or emirate-level legislation. The employment rules that apply in free zones vary, and not all free zones automatically adopt the mainland federal Labour Law framework for every provision.
DIFC Employment Framework
The Dubai International Financial Centre (DIFC) operates under the DIFC Employment Law, which is separate from the mainland UAE Labour Law. The DIFC has its own end-of-service provisions, and employees governed by DIFC law should refer to the DIFC Employment Law and any applicable DIFC Employment Court guidance rather than the standard federal formula.
ADGM Employment Framework
Abu Dhabi Global Market (ADGM) also operates under its own employment regulations — the ADGM Employment Regulations. Like the DIFC, ADGM has distinct rules for end-of-service entitlements. Employees working under ADGM regulation should not rely on the standard mainland gratuity formula as their entitlement.
Other Free Zones
Many other UAE free zones — including Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), Abu Dhabi Airports Free Zone, and others — operate under the federal UAE Labour Law for employment matters, even though they have their own licensing and regulatory frameworks for business activities. Employees in these zones generally fall under the standard federal gratuity framework, but should confirm this with their employer or the relevant free zone authority.
Official Sources & Legal Basis
Official Sources
GovUAE Government Portal — u.aeMOHREMinistry of Human Resources — mohre.gov.aeIndependence: Independent calculator — not affiliated with MOHRE, the UAE Government, Dubai Development Authority, or any government entity.