Gratuity Page — Guide Article (paste BELOW the calculator on the same page)

Page title suggestion: UAE Gratuity Calculator – End of Service Benefits 2026 Slug: /uae-gratuity-calculator/ Rank Math meta description: Free UAE gratuity calculator based on the latest Labour Law. Calculate your end-of-service benefits in seconds, with examples and rules explained.

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How Gratuity Is Calculated in the UAE (Complete Guide)

Gratuity — officially called the end-of-service benefit — is a lump sum that private-sector employees in the UAE receive when their employment ends. It is a legal right under Federal Decree-Law No. 33 of 2021 (the UAE Labour Law), which applies to employment from 2 February 2022 onwards. This guide explains exactly how it works, so you can understand the number our calculator gives you.

Who is entitled to gratuity?

You are entitled to gratuity if:

• You work in the UAE private sector under a valid employment contract; and
• You have completed at least one full year of continuous service with the same employer.

If you leave before completing one year, no gratuity is payable. Days of unpaid leave are not counted as part of your service period.

Foreign (expatriate) employees receive gratuity. UAE and GCC nationals are instead registered in national pension schemes, so gratuity rules generally do not apply to them.

The basic formula

Gratuity is calculated on your basic salary only — allowances for housing, transport, phone or anything else are excluded. This is why your contract’s salary breakdown matters so much.

The law sets two rates:

• 21 days of basic salary for each year of the first five years of service;
• 30 days of basic salary for each year after five years.

To work this out, you first need your daily basic wage:

Daily basic wage = (Basic monthly salary × 12) ÷ 365

Then:

Gratuity = (21 × daily wage × years up to 5) + (30 × daily wage × years above 5)

Partial years after the first full year are paid pro rata — for example, 3 years and 6 months of service earns you 3.5 years’ worth of gratuity.

Finally, the law caps the total: gratuity cannot exceed two years’ salary.

Worked example 1 — less than 5 years

Fatima has a basic salary of AED 6,000 and resigns after 4 years of service.

• Daily wage: (6,000 × 12) ÷ 365 = AED 197.26
• Gratuity: 21 × 197.26 × 4 = AED 16,570

Worked example 2 — more than 5 years

Imran has a basic salary of AED 8,000 and leaves after 8 years.

• Daily wage: (8,000 × 12) ÷ 365 = AED 263.01
• First 5 years: 21 × 263.01 × 5 = AED 27,616
• Next 3 years: 30 × 263.01 × 3 = AED 23,671
• Total gratuity: AED 51,287

Resignation vs termination — did the rules change?

Yes, and this is the most common point of confusion. Under the old law, employees on unlimited contracts who resigned received reduced gratuity (one-third or two-thirds, depending on service length). The 2022 Labour Law abolished this reduction. Today, whether you resign or your employer terminates you, you receive your full gratuity for your service period — provided you completed at least one year and served your notice period properly.

You can still lose gratuity in limited situations, for example if you are dismissed for one of the serious violations listed in the law, or amounts can be deducted if you owe your employer money.

What about free zones like DIFC and ADGM?

Most UAE free zones follow the federal Labour Law, so the calculation above applies. The two major exceptions are:

• DIFC (Dubai International Financial Centre): employers contribute monthly to the DEWS workplace savings plan instead of paying a lump-sum gratuity.
• ADGM (Abu Dhabi Global Market): operates a similar employer-contribution savings scheme.

If you work in DIFC or ADGM, check your scheme’s statement rather than using the standard formula.

When must gratuity be paid?

Under the Labour Law, your employer must pay all end-of-service entitlements — including gratuity, unpaid salary and payment for unused annual leave — within 14 days of your last working day. If payment is delayed, you can file a complaint with MOHRE (call 600 590000 or use the MOHRE app).

Tips to avoid gratuity disputes

1. Check your contract’s salary split. A very low “basic” with high allowances legally reduces your gratuity. Know your numbers before signing.
2. Keep records of your joining date, contract copies and salary certificates.
3. Serve your notice period as per your contract — failing to do so can lead to deductions.
4. Count unpaid leave. Long unpaid leave extends the calendar but not your service period.
5. Get the final settlement in writing and check it against this calculator before signing any receipt.

Frequently asked questions

Is gratuity calculated on gross or basic salary? Basic salary only. Allowances are excluded by law.

Do I get gratuity if I resign after 2 years? Yes. Under the current law you receive the full 21-days-per-year rate for your entire service period, even on resignation.

Is gratuity taxable in the UAE? No. The UAE has no personal income tax, so your gratuity is paid in full.

Does my gratuity include my notice period? Yes — your service period runs up to your last official working day, including a worked notice period.

My employer says the company has no money. Do I still get gratuity? Gratuity is a legal debt owed to you. If your employer does not pay, file a complaint with MOHRE.

This guide is for general information only and is not legal advice. Rules can change — always confirm your final settlement with your HR department or MOHRE.