UAE End-of-Service Gratuity Calculator
UAE End-of-Service Gratuity Calculator
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Understanding gratuity under UAE Labour Law
End-of-service gratuity is a lump-sum payment a private-sector employee is legally owed when their employment ends — by resignation, termination, or contract expiry — once they have completed at least one full year of continuous service. Under Article 51 of Federal Decree-Law No. 33 of 2021, it is calculated on the employee’s last basic salary only, not the full monthly wage.
This is a common point of confusion. Housing, transport, and every other allowance sit outside the calculation — only the basic wage counts, and the daily rate is that basic figure divided by 30. Getting this wrong, often by treating gross salary as the base, is one of the most frequent sources of final-settlement disputes referred to MOHRE.
The formula is built on two tiers. For each of the first five years of service, the employee earns 21 days of basic wage. From the sixth year onward, each additional year earns 30 days. Whatever the length of service, the total gratuity can never exceed the equivalent of two years’ basic wage.
Since February 2022, the law no longer distinguishes between limited and unlimited contracts — all private-sector contracts are now fixed-term, and the same formula applies whether an employee resigns or is terminated. Employers must settle gratuity and all other end-of-service entitlements within 14 days of the contract ending.
Calculate gratuity in 3 steps
1
Choose your mode
Use I know my service length if you already know your years and months. Use Calculate from my dates to work it out from your start date and last working day.
2
Enter salary & service
Type in your monthly basic salary — or use the gross helper — then add your length of service and reason for leaving.
3
Get the breakdown
See the maths behind the formula
Basic monthly salary
AED 10,000
Length of service
3 years
Daily rate
AED 333.33
Days accrued (21 × 3)
63 days
Gratuity
AED 21,000
10,000 ÷ 30 × 21 × 3
Basic monthly salary
AED 10,000
Length of service
7 years
First 5 yrs (21 × 5)
105 days
After 5 yrs (30 × 2)
60 days
Gratuity (165 days)
AED 55,000
(105 + 60) × (10,000 ÷ 30)
Entitlement
How gratuity accrues
- 21 days’ basic wage per year — first 5 years
- 30 days’ basic wage per year — after 5 years
- Under 1 year of service — no entitlement
Basis
How it's paid
- Based on your last BASIC salary
- Daily rate = basic ÷ 30
- Partial years after year one are pro-rated
Entitlement
The 2-year cap
- Total can never exceed 2 years’ basic wage
- Applies however long the service (Art. 51)
- Lawful deductions may be taken before paying
Frequently Asked Questions
The questions Our payroll team gets asked most often.
Basic salary only. Under Article 51 of Federal Decree-Law No. 33 of 2021, gratuity is based on the last basic wage, excluding housing, transport, and other allowances. Employers cannot inflate allowances to shrink the basic figure and reduce the liability.
21 calendar days’ basic wage for each of the first five years of service, and 30 days’ basic wage for each year after that. The daily rate is your monthly basic salary divided by 30. The total is capped at two years’ basic wage, and you need at least one year of continuous service to qualify.
Yes. Under the current law, an employee who completes at least one year of continuous service receives the same full gratuity whether they resign or are terminated. The old one-third / two-thirds reduction applied to the previous unlimited-contract regime, abolished when Federal Decree-Law No. 33 of 2021 took effect in February 2022. Dismissal for gross misconduct under Article 44 is the main exception.
No gratuity is due. One full year of continuous service is the minimum qualifying period. Periods of unpaid leave are excluded from the service length used in the calculation.
Yes. However long the service, the total cannot exceed the equivalent of two years’ basic wage. This ceiling is set by Article 51 and applies after the standard 21/30-day formula.
Part-time and flexible-work employees who meet the one-year requirement receive a pro-rated gratuity. Under Article 30 of Cabinet Resolution No. 1 of 2022, contracted annual hours are divided by full-time annual hours to get a percentage, which is applied to the full-time gratuity figure.
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