Gratuity Calculator UAE 2025 | Your Full End-of-Service Benefit Guide

Welcome to the UAE, a dynamic hub of opportunities! As an expat or resident, understanding your rights and entitlements at the end of your employment is crucial. One of the key benefits you might be eligible for is the End-of-Service Gratuity, often simply called “gratuity.” Think of it as a significant “thank you” payment from your employer for your dedicated service, a final financial acknowledgment of your contributions.

This comprehensive guide, featuring our easy-to-use gratuity calculator UAE, is designed to make this often-confusing topic crystal clear. We’ll break down the rules in straightforward, human language, so you know exactly what to expect and can plan your financial future with confidence.

Disclaimer: While our gratuity calculator UAE provides a highly accurate estimate based on the current UAE Labour Law, it is for informational purposes only and should not be considered legal advice. Specific situations can be complex, and it is always advisable to consult with a legal professional or the Ministry of Human Resources & Emiratisation (MoHRE) for precise calculations and personalized advice.

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What Exactly is Gratuity in the UAE?

Gratuity is a one-time, lump-sum payment that companies in the UAE’s private sector (and certain other entities) are legally required to pay to their employees when their work contract comes to an end. It’s a statutory right, meaning it’s mandated by law, not just an optional benefit.

Key takeaway: Gratuity is not a part of your regular monthly salary. It’s a separate benefit paid out at the conclusion of your employment relationship, provided you meet specific eligibility criteria.

Who is Eligible for Gratuity in the UAE?

Most full-time employees in the UAE’s private sector are entitled to gratuity. However, certain conditions must be met:

• Minimum Service Period: You must complete at least one full year of continuous service with the same employer. If you leave or are terminated before completing 12 months, you will generally not be entitled to gratuity.
• Expatriate Workers: Gratuity primarily applies to expatriate workers. UAE and GCC (Gulf Cooperation Council) nationals typically fall under different national pension and social security schemes and are usually not eligible for gratuity under the Labour Law.
• Based on Basic Salary: This is a vital point! Gratuity is calculated ONLY on your basic salary, which is the fixed, unconditional part of your pay. It explicitly excludes all allowances for housing, transport, utilities, mobile phones, or any bonuses, commissions, or other variable payments.

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The UAE Labour Law: Your Gratuity Rulebook (Federal Decree-Law No. 33 of 2021)

The calculation of gratuity in the UAE is governed by the Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, which became effective on February 2, 2022. This landmark law significantly updated previous legislation, bringing considerable changes, particularly regarding contract types. You can find the full text of the law and its executive regulations on the official Ministry of Human Resources & Emiratisation (MoHRE) website. Visit MoHRE’s Official Website

Important Note: Prior to 2022, UAE employment contracts were categorized as “limited” (fixed-term) or “unlimited” (indefinite). The new law primarily focuses on limited-term contracts. While many older “unlimited” contracts were converted, the calculation logic for gratuity still largely distinguishes between scenarios that reflect the outcomes of the old “limited” and “unlimited” contract rules, especially concerning resignation. Our gratuity calculator UAE is programmed to accurately reflect these nuances, ensuring you get the most precise estimate. If you’re curious about the specifics, check out our detailed article on the UAE Labour Law Gratuity Changes 2022.

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How to Calculate Your Gratuity: The Step-by-Step Breakdown

Calculating your end-of-service gratuity involves a few key factors: your total service period, your last basic salary, and the reason for your employment ending.

Let’s simplify the formulas and rules:

1. Determine Your Total Service Period

This is the exact duration you have continuously worked for your employer, from your official start date to your official end date.

Important: Any days you took as unpaid leave are typically not counted towards your service period for gratuity calculation. However, fully paid sick leave, maternity leave, and annual leave do count towards your service period. If you want to understand this better, read our guide on Unpaid Leave Impact on UAE Gratuity.

2. Identify Your Last Basic Monthly Salary

As previously mentioned, this refers to the fixed component of your salary, excluding any allowances, commissions, or bonuses. It’s crucial to use your last basic salary drawn before your employment officially concluded. For more clarity on this, refer to our article: Basic Salary vs. Gross Salary for Gratuity UAE.

3. Apply the Gratuity Formulas Based on Service Years

The specific amount of gratuity you receive depends on how long you’ve served your employer:

• Less than 1 year of continuous service: Generally, no gratuity is payable.
• From 1 year up to less than 5 years (e.g., 1 year and 1 day to 4 years and 364 days):
  • You are entitled to 21 days of basic pay for each completed year of service.
• 5 years or more of continuous service:
  • For the first five years, you receive 21 days of basic pay for each year.
  • For each additional year beyond five years, you receive 30 days of basic pay.

Example: If you served for 7 years:

• You would receive 21 days’ basic pay for Years 1 through 5.
• You would then receive 30 days’ basic pay for Years 6 and 7.

4. Consider the Impact of Resignation vs. Termination

While the new UAE Labour Law (Federal Decree-Law No. 33 of 2021) primarily deals with limited-term contracts, the Executive Regulations still provide specific calculation methods for different scenarios of employment termination, including resignation. This means the reason for your departure can still impact your gratuity amount.

Scenario A: Employer Terminates Your Contract (Not Due to Misconduct)

If your employer ends your contract and it is not due to your gross misconduct (as defined in the Labour Law), you are generally entitled to full gratuity based on the calculations above. This applies irrespective of your original contract type.

Scenario B: Employee Resignation

This is where the calculation can become nuanced, especially for scenarios that historically aligned with “unlimited” contracts. Under the new law, the following rules generally apply to resignations:

• If you resign with less than 1 year of service: No gratuity.
• If you resign with 1 year to less than 3 years of service: You receive 1/3rd (one-third) of the full gratuity amount that would have been calculated for your service period.
• If you resign with 3 years to less than 5 years of service: You receive 2/3rds (two-thirds) of the full gratuity amount that would have been calculated for your service period.
• If you resign with 5 years or more of service: You receive the full gratuity amount (no reduction).

For a deep dive into these scenarios, please read our dedicated article: Gratuity Calculation for Resignation in UAE.

Scenario C: Summary Dismissal (Termination for Gross Misconduct)

If your employment is terminated by the employer for specific, serious reasons (gross misconduct, as detailed in Article 44 of the UAE Labour Law), you are generally not entitled to any gratuity. This is a critical point that needs clear understanding. Learn more about these specific circumstances in our guide: Summary Dismissal UAE Gratuity.

5. The Gratuity Cap

There’s a very important limit to remember: Your total gratuity amount cannot exceed your basic salary for two years (24 months).

• Maximum Gratuity = Basic Monthly Salary x 24

Our gratuity calculator UAE automatically applies this cap to ensure your estimate is compliant with the law.

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Using Our Gratuity Calculator UAE: What You’ll Need

Our gratuity calculator UAE simplifies these complex rules into an intuitive, user-friendly tool. To get your estimated gratuity, you’ll simply need to input:

1. Your Employment Start Date: (Day, Month, Year)
2. Your Employment End Date: (Day, Month, Year)
3. Your Basic Monthly Salary (in AED): Remember, this is only your basic pay.
4. Your Original Contract Type: (Limited Term / Unlimited Term – helpful for historical context and specific resignation calculations).
5. Reason for Leaving: (Employer Termination / Employee Resignation / Summary Dismissal).
6. Number of Unpaid Leave Days (if any): (Enter ‘0’ if none, as these days are typically excluded from the service period for calculation).

Once you hit “Calculate,” our tool will swiftly provide you with an estimated gratuity amount, along with a clear, concise breakdown of how that estimate was reached.

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Why Our Gratuity Calculator UAE is an Essential Tool for You

• Clarity and Transparency: It helps demystify the legal jargon, allowing you to clearly understand your rights and how your end-of-service benefits are determined.
• Empowered Financial Planning: Knowing an estimated amount allows you to accurately plan your finances for your transition after employment, whether you’re moving to a new role or a new country.
• Verification and Confidence: You can use our calculator to cross-check the amount your employer offers, ensuring it aligns with the provisions of the UAE Labour Law. This empowers you to discuss any discrepancies confidently.
• Ease of Use: Forget complex manual calculations. Our calculator handles the intricate legal formulas, providing quick and reliable estimates.

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Other Important Gratuity Considerations & Frequently Asked Questions (FAQs)

What about part-time or temporary employees?

The new UAE Labour Law and its Executive Regulations also cover end-of-service benefits for employees on part-time, temporary, or flexible contracts. Their gratuity is usually calculated proportionally based on the hours worked compared to a full-time schedule. This can be a more complex calculation that might require specific legal advice.

What is the “Voluntary End of Service Benefits Savings Scheme” (DEWS)?

The UAE has introduced voluntary savings schemes (like DEWS – Dubai Employee Workplace Savings) as an alternative to the traditional lump-sum gratuity, especially in certain Free Zones like DIFC (Dubai International Financial Centre) and for government entities. Employers can contribute a monthly percentage of your basic salary into a licensed fund. This fund then grows with investments. If your employer has opted into such a scheme for you, your gratuity might be replaced by the value accumulated in this fund. It’s crucial to understand if you are part of such a scheme. For more details, explore our article: DEWS Scheme UAE vs. Traditional Gratuity. You can also find official information on the DEWS scheme through Zurich Middle East’s portal for DEWS: Explore DEWS.

When should my gratuity be paid?

According to the UAE Labour Law, your employer must pay your gratuity and all other end-of-service dues (like accrued leave pay) within 14 days from the official date your employment contract ends.

Can my employer make deductions from my gratuity?

Yes, an employer can deduct any amounts legally owed by the employee from their gratuity payment, provided these deductions are in strict accordance with the Labour Law. This could include things like outstanding company loans, proven damage to company property, or certain fines as per company policy and law.