This gratuity calculator UAE calculates your expected gratuity amount based on the years of service and your basic salary. It is not meant to be definite as it does not take into account any special conditions. Use this calculator to get an estimate of your gratuity based on the new UAE labor laws.
UAE Gratuity Calculator
Enter your last basic salary and employment dates to estimate your end-of-service gratuity.
This is an estimate under Federal Decree-Law No. 33 of 2021 for full-time private-sector employees. It does not account for unpaid leave, deductions or special contract terms. Under the current law, resignation and termination are calculated the same way once you have completed one year of service.
What Does Gratuity Mean?
Gratuity is the amount of money an employer will pay you after the end of your employment. It is a mandatory payment for every employee who is eligible, and is calculated based on your salary.
Also called the “final settlement” or an “end-of-service benefit”, it is meant to act as a safety net for individuals in between jobs to help them manage their expenses. Gratuity increases the longer you stay with an employer, so it also incentivizes employees to commit to a job.
Remember: It’s important to remember that gratuity in UAE is calculated on your last paid basic salary, not the gross salary. So if you make AED 15,000 a month, but AED 7,000 of that is housing and transport allowances, your basic salary is AED 8,000 and will be the basis of your gratuity payment calculation.
Who Can Get Gratuity in the UAE?
- Expats who have completed one year of service with a local employer
- Part-time employees
- Temporary employees
- Domestic workers
3 Factors That Affect Gratuity in UAE
1. Duration of Employment
A recent update to the UAE labor law allowed employees to receive gratuity after completing one year of service with an employer. You cannot get gratuity if you resign during your probation but the probation period is included in your end-of-service benefit calculation once you have completed it.
If you work at a company for less than five years, gratuity will be calculated on the basic salary for 21 days, for every year of employment for the five years. Gratuity calculations for employment periods over five years are a little different.
Say you worked at a company for six years and then left. Your gratuity will be calculated on 21 days of your basic salary for the first five years, and then on 30 days of your basic salary for the next year.
If you worked somewhere for seven years, you would get 30 days of your basic salary for an additional two years. In any case, gratuity payments cannot go over two years of your basic salary.
| Years of Service | Gratuity Calculation |
|---|---|
| Less than 1 year | No gratuity |
| 1-5 years | 21 days basic salary per year |
| More than 5 years | 21 days basic salary for five years + 30 days basic salary per additional year |
2. Type of Contract
Generally, you can be hired under a limited or an unlimited contract. A limited contract just means that your employment has a set end date, but can be renewed. An unlimited contract does not have an end date.
Under the current UAE Labour Law (Federal Decree-Law No. 33 of 2021), the type of contract no longer changes how your gratuity is calculated. Whether you resign or your employer ends the contract, the same 21-day and 30-day rules apply once you have completed one year of service.
As per an update by MOHRE, the unlimited contract is no longer valid under the UAE labour law. Existing unlimited contracts had to be converted into fixed-term contracts.
3. Termination vs Resignation
The way you end your employment no longer reduces your gratuity. Since the new labour law took effect in February 2022, the old rule that cut gratuity for employees who resigned within five years has been abolished. As long as you have completed at least one year of continuous service, your gratuity is calculated in full using the rules above, whether you resign or are terminated.
Even if you are dismissed without notice under Article 44 of the labour law (for example, for serious misconduct), your gratuity is not automatically forfeited. Your employer can, however, deduct amounts you legally owe, as explained below.
Gratuity Calculation Formula
This is how to calculate gratuity for service periods under 5 years:
Gratuity = (Basic Salary × No. of Eligible Days × Years of Service) ÷ 30
The formula changes slightly for service periods over 5 years:
Gratuity = (Basic Salary × 21 × Years of Service until 5) ÷ 30 + (Basic Salary × 30 × Rest of the Years) ÷ 30
Example 1: Let’s say you were at a company for five years and then resigned. You were hired on an unlimited contract and were paid AED 7,000 as your basic salary. This is how your gratuity will be calculated:
(7,000 × 21 × 5) ÷ 30 = AED 24,500
Example 2: Or suppose you decided to retire from your job after a 20-year stint, where you had a basic salary of AED 35,000. Your gratuity would be:
(35,000 × 21 × 5) ÷ 30 + (35,000 × 30 × 15) ÷ 30 = AED 647,500
What Happens When Employers Don’t Pay Gratuity?
As the UAE mandates gratuity payments to eligible employees, failure to make these payments can get your employer into trouble with the government. Employees have the right to file a complaint to MOHRE (Ministry of Human Resources and Emiratisation) if they do not receive their gratuity within 14 days of the end of their employment.
Employers that delay payments can face consequences like:
- Heavy penalties
- Legal intervention
- Added interest on pending gratuity payments
- Suspension of trade license
- Difficulty in recruiting new hires
Can My Employer Deduct My Gratuity?
Your employer cannot just withhold your gratuity. Under the UAE Labour Law, your employer can only legally be allowed to make deductions from your end-of-service but only under certain circumstances:
- If your employer gave you a salary advance or a loan during your employment that you haven’t repaid yet, they can recover that outstanding amount from your final settlement.
- If you are found to be at fault or negligent for causing damage to the company’s materials, the cost to repair or replace those items can be recovered.
- If you resign and don’t serve your notice period, your employer can deduct the salary equivalent of the missing notice period from your settlement.
- Any fines or penalties you owe under the company’s official disciplinary rules may be taken out of your final pay.
FAQs
How do I Calculate Gratuity in the UAE?
Gratuity is calculated based on your basic salary and years of service. The formula is your basic salary multiplied by the number of eligible days multiplied by years of service divided by 30.
Can I Get Gratuity if I Resign After One Year?
You can get gratuity if you resign after one year. The UAE now allows employees to receive gratuity after they complete one year of service at an employer.
Can Gratuity be Paid in Advance in UAE?
You can withdraw some of your gratuity amount in advance, however, this amount will be deducted from your end of service payout when you leave the company. You cannot receive your entire gratuity until you end your employment contract.
What is the New Rule for Gratuity in UAE?
Gratuity can now be paid to employees who have completed one year of service at a company in the UAE.
Can I Get Gratuity if Terminated in UAE?
If you are terminated, you are still eligible for gratuity as long as you worked at your company for at least one year. Under the current law, even a dismissal for misconduct does not automatically cancel your gratuity, although your employer can deduct amounts you legally owe.
What are the Rules for MOHRE Gratuity?
According to MOHRE, every employee in UAE is eligible for gratuity after one year of employment at a specific company.
Do You Get Gratuity If You Resign?
Yes. You can receive gratuity if you resign, as long as you have completed a minimum of one year of service. Under the current UAE labour law, resigning no longer reduces your gratuity — it is calculated in full, the same as if your employer had ended your contract.
What is the Maximum Limit of Gratuity Payment?
Your gratuity payment cannot exceed two years of your basic salary. This is the salary you receive without including benefits or allowances.
What is the Minimum Service for Gratuity?
The UAE labor law dictates that employees must be employed for at least one year at a company before they can receive gratuity. However, certain conditions may warrant earlier eligibility.
When Will I Get Final Settlement in UAE?
Your employer has 14 days after the end of your contract to pay you the gratuity amount. If you do not receive your final settlement amount within this time, you can file a complaint with the MOHRE (Ministry of Human Resources and Emiratisation).
Need help with end-of-service settlements?
A&A Associate’s payroll team calculates gratuity, final settlements and WPS payroll for UAE businesses — accurately and on time.
