UAE Gratuity Calculator

Instantly calculate your end of service gratuity in the UAE based on the latest Labour Law guidelines

Gratuity Calculator UAE

Your Gratuity

About the UAE Gratuity Calculator

The UAE Gratuity Calculator is a free online tool designed to help employees working in the United Arab Emirates estimate their end-of-service gratuity. This benefit is a legal right for most private-sector expatriate employees and is calculated based on the basic salary, duration of employment, contract type (limited or unlimited), and reason for leaving (resignation or termination).

This tool simplifies complex calculations by applying official formulas from the UAE Labour Law (Federal Decree-Law No. 33 of 2021), ensuring that employees can easily understand their entitlements before exiting a company.

What is Gratuity in the UAE?

Gratuity, also referred to as end-of-service benefits, is a lump sum payment that employers must provide to eligible employees when their service ends. It serves as a financial reward for the time spent working in the company and is mandatory under UAE Labour Law for non-national employees who complete at least one full year of continuous employment.

Gratuity payments are calculated only on the employee’s last drawn basic salary, excluding allowances such as housing, transport, or bonuses.

Who Can Use This Gratuity Calculator?

This UAE Gratuity Calculator is intended for:

  • Private-sector employees working under the UAE Labour Law
  • Expatriates (non-citizens of the UAE)
  • Employees with either limited or unlimited contracts
  • Those who are resigning, retiring, or being terminated

Note: Employees working in the public sector, domestic workers, or UAE nationals (who are entitled to pensions) are not covered under the same gratuity calculation rules.

Required Inputs for Gratuity Calculation

To calculate your gratuity correctly, you need to input the following:

  1. Basic Monthly Salary (in AED)
    Only the base salary is considered for gratuity – do not include any allowances.
  2. Start Date of Employment
    The official start date of your job (as per your contract).
  3. End Date of Employment
    The final working date or termination date.
  4. Contract Type
    Select whether you are on a limited contract (fixed-term) or unlimited contract (open-ended).
  5. Reason for Leaving
    Indicate whether you are leaving due to resignation or termination.

How Gratuity is Calculated in the UAE

The UAE Labour Law provides different calculation methods depending on the contract type and reason for departure.

1. Gratuity Calculation for Limited Contracts

If you have completed your limited contract term, the following rules apply:

  • 1 to 5 years of service:
    Gratuity = 21 days’ basic salary per year of service
  • More than 5 years:
    Gratuity = 30 days’ basic salary per year after 5 years

Formula:
Gratuity = (Basic Salary × Number of Entitled Days × Number of Years Worked) ÷ 30

Important Notes:

  • If you resign before completing your contract term, you may lose some or all of your gratuity rights unless you qualify under Article 121 of the Labour Law.
  • If your employer terminates the contract without cause, you are fully entitled to gratuity.

2. Gratuity Calculation for Unlimited Contracts

The unlimited contract has different rules depending on the length of service and whether the employee resigned or was terminated.

a. Resignation under Unlimited Contract

  • Less than 1 year: No gratuity
  • 1 to 3 years: Entitled to 1/3 of 21 days’ basic salary per year
  • 3 to 5 years: Entitled to 2/3 of 21 days’ basic salary per year
  • More than 5 years: Full 21 days’ basic salary for first 5 years, then 30 days per year thereafter

b. Termination under Unlimited Contract

  • Less than 1 year: No gratuity
  • 1 to 5 years: Full 21 days’ basic salary per year
  • More than 5 years: 21 days’ basic salary for first 5 years + 30 days’ salary for every additional year

Formula Example:
For an employee with 7 years of service:
Gratuity = (21 × 5 + 30 × 2) × Basic Salary ÷ 30

According to the UAE Labour Law, the following conditions apply:

  • You must complete at least one full year of service with the employer to be eligible for gratuity.
  • The basic salary is the only component considered in the gratuity calculation.
  • If an employee is terminated for gross misconduct or leaves without proper notice, they may lose gratuity rights under Article 139.
  • Gratuity must be paid within 14 days of termination or resignation, according to Article 53 of the Labour Law.

Frequently Asked Questions (FAQs)

Q1: Who qualifies for gratuity in the UAE?
Employees in the private sector who are not UAE nationals and who have completed at least one full year of continuous service.

Q2: Is gratuity calculated on gross salary or basic salary?
Gratuity is calculated based only on the basic salary, not gross salary.

Q3: Is gratuity paid in addition to other benefits like unused leave?
Yes. Gratuity is separate from other entitlements such as leave encashment, air ticket reimbursement, or notice period salary.

Q4: Can an employer refuse to pay gratuity?
Only in cases of serious misconduct or violations specified under Article 139. Otherwise, gratuity is a mandatory right.

Q5: Is there a maximum gratuity payout?
Yes. The total gratuity amount cannot exceed two years’ basic salary, as per the law.

  • Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations
  • Ministerial Resolution No. 765 of 2015
  • Article 53 – Payment deadline after termination
  • Article 139 – Conditions under which gratuity is forfeited
  • Article 121 – Employee right to resign without notice

Final Notes and Disclaimer

This UAE Gratuity Calculator is intended to provide an estimated calculation of your end-of-service benefits based on the inputs you provide. The actual amount may vary depending on your employment contract, specific company policies, or legal disputes. For official claims or in case of discrepancies, employees should contact the Ministry of Human Resources and Emiratisation (MOHRE) or seek legal consultation.

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