UAE Gratuity Calculator (End of Service Benefit)

How is gratuity calculated in the UAE?

End of service gratuity for private sector employees in mainland UAE is set by Article 51 of Federal Decree-Law No. 33 of 2021. It is based only on your last basic salary. Housing, transport and other allowances do not count.

The calculator follows four steps:

1. Work out your daily basic wage. Common practice is monthly basic salary divided by 30. The law itself does not name a divisor, so some employers use a different one.
2. Multiply the daily wage by 21 for each of your first five years of service.
3. Multiply the daily wage by 30 for each year after the fifth. Part years are paid pro rata.
4. Check the total against the cap: gratuity cannot be more than two years of your wage.

Days of unpaid leave or unpaid absence do not count as service, so the calculator removes them before it works out your years.

A worked example

Say your last basic salary is AED 10,000 a month and you worked exactly 7 years with no unpaid leave.

• Daily basic wage: 10,000 / 30 = AED 333.33
• First 5 years: 5 x 21 x 333.33 = AED 35,000
• Next 2 years: 2 x 30 x 333.33 = AED 20,000
• Total: AED 55,000, well under the cap of AED 240,000 (24 months of basic salary)

Your package might be AED 16,000 a month once housing and transport are added, but only the AED 10,000 basic is used.

What if you leave partway through a year?

Part years count. With a basic salary of AED 6,000 and 3 years and 6 months of service, the daily wage is AED 200 and gratuity is 3.5 x 21 x 200 = AED 14,700. If you leave after 11 months, there is no gratuity, because the minimum is one full year of continuous service.

Rules to know

Does resigning reduce your gratuity?

No. Under the old law, people who resigned early lost part or all of their gratuity. The 2021 law removed those reductions, so you get the same amount whether you resign or your employer ends the contract, as long as you have at least one year of service. Any money you legally owe your employer can be deducted.

When this calculator does not apply

• DIFC and ADGM: the two financial free zones run their own end of service schemes (DIFC uses the DEWS savings plan), so the result here will not match.
• UAE and GCC nationals: they are covered by the pension system (GPSSA in the UAE) instead of gratuity.
• Alternative savings scheme: since Cabinet Resolution 96 of 2023, employers can opt into an approved end of service savings scheme. If yours has, your benefit is paid through that fund.
• Government jobs: public sector employees follow separate HR laws.

Tips before your last day

• Check your contract and latest payslip for your exact basic salary. It is often only 50 to 60 percent of the total package.
• Ask for your unused leave to be settled too. You can estimate it with our annual leave calculator.
• Keep copies of your contract, payslips and any unpaid leave records in case the numbers do not match.
• If your final settlement is late or short, you can file a complaint with MOHRE. Our UAE labour law guide for employees explains the steps.