What is UAE Gratuity?
The UAE Gratuity Calculator estimates your End of Service Benefits (EOSB) — a lump sum payment every employee in the UAE is entitled to upon leaving their job. Gratuity is governed by the UAE Labour Law (Federal Decree-Law No. 33 of 2021) and applies to all employees who have completed at least one year of continuous service.
UAE gratuity is calculated based on your basic salary (excluding allowances like housing, transport, and phone). For the first 5 years, you receive 21 days of basic salary per year. After 5 years, this increases to 30 days per year. The total gratuity is capped at 2 years' total salary.
Under the new UAE Labour Law (effective February 2, 2022), all employment contracts are now limited contracts (fixed-term). The old distinction between limited and unlimited contracts for gratuity calculation has been simplified. Employees who resign after 1+ year of service receive full gratuity without the previous tiered deductions.
Gratuity is typically paid within 14 days of the last working day. It is not subject to UAE income tax (since the UAE has no personal income tax). However, any outstanding loans, advances, or company property costs can be deducted from the gratuity.
Free zone employees (DIFC, JAFZA, DAFZA, etc.) follow the same gratuity rules unless their free zone has specific regulations. DIFC employees follow DIFC Employment Law which has similar but slightly different calculations.
Planning your finances as an expat? Also check our UAE Salary Calculator and UAE VAT Calculator.
Formula
UAE Gratuity (EOSB) Formula:
First 5 years: 21 days of basic salary × number of years After 5 years: 30 days of basic salary × (total years − 5) Daily wage = Monthly basic salary / 30
Total Gratuity = First 5 years component + After 5 years component Cap: Total gratuity cannot exceed 2 years of total salary.
Worked Example — AED 10,000 basic salary, 8 years: Daily wage = 10,000 / 30 = AED 333.33 First 5 years = 333.33 × 21 × 5 = AED 35,000 After 5 years = 333.33 × 30 × 3 = AED 30,000 Total gratuity = AED 65,000
Gratuity at common salary levels (8 years service): - AED 5,000 basic → AED 32,500 - AED 10,000 basic → AED 65,000 - AED 15,000 basic → AED 97,500 - AED 20,000 basic → AED 130,000 - AED 30,000 basic → AED 195,000
Gratuity by years of service (AED 10,000 basic): - 1 year → AED 7,000 - 3 years → AED 21,000 - 5 years → AED 35,000 - 10 years → AED 85,000 - 15 years → AED 135,000 - 20 years → AED 185,000
How to use this UAE Gratuity Calculator?
1. Enter your Basic Monthly Salary — this is the basic component only, excluding housing allowance, transport allowance, phone allowance, and other benefits. Check your employment contract or salary slip for the basic salary figure.
2. Enter Years of Service — complete years you have worked with this employer.
3. Enter Additional Months — any months beyond complete years (0-11).
4. Read Results: See your total gratuity, broken down into the first 5 years component (21 days/year) and the after 5 years component (30 days/year).
Important: Gratuity is calculated on basic salary only. If your contract states an all-inclusive salary without separating basic from allowances, you may need to negotiate or refer to Ministry of Human Resources guidelines.