UAE Gratuity Calculator 2026 | Free End of Service Estimator
Instantly calculate your end of service gratuity under UAE Labour Law. Works for limited & unlimited contracts, resignation & termination.
UAE Gratuity Calculator 2026
Based on Federal Decree-Law No. 33 of 2021| Service Period | Daily Wage | Eligible Days | Amount (AED) |
|---|
⚠️ This is an estimate for guidance only. Actual amounts may vary based on company policy, unpaid leave, or specific contract terms. Consult MOHRE or your HR department for an official figure.
What is Gratuity (مكافأة نهاية الخدمة) in the UAE?
Gratuity (مكافأة نهاية الخدمة) in the UAE is a lump-sum end-of-service payment that employers are legally required to pay employees who have completed at least one year of continuous service. It is a financial right enshrined under Article 51 of the UAE Labour Law (Federal Decree-Law No. 33 of 2021).
Many employees – especially expatriates in the private sector – are unaware of how their gratuity is calculated, or whether their contract type affects the final amount. This page explains everything you need to know, and our free UAE gratuity calculator gives you an instant estimate.
Gratuity is sometimes called end-of-service benefits (EOSB) or end-of-service gratuity. Regardless of the term, the calculation method and legal obligations under UAE law are the same.
- Mandatory under UAE Labour Law
- Applies to private sector employees
- Calculated on basic salary only
- Minimum 1 year service required
- Capped at 2 years’ basic salary
- Must be paid within 14 days of leaving
- Applies in most UAE free zones
How to Calculate Gratuity in UAE (2026 Formula)
Understanding how to calculate gratuity in UAE requires knowing your basic salary, total years of service, and contract type. The standard gratuity calculation formula under UAE Labour Law is:
▸ First 5 years: 21 days per year
▸ Beyond 5 years: 30 days per year
▸ Maximum cap: 2 years’ basic salary
UAE Gratuity Calculation — Visual Guide
Step-by-Step: How to Compute Gratuity in UAE
- Identify your last drawn basic salary (exclude housing, transport, and other allowances)
- Calculate your daily wage: Basic Salary ÷ 30
- Multiply by 21 days for each completed year in the first 5 years
- Multiply by 30 days for each completed year beyond 5 years
- Add both amounts – this is your total gratuity
- Ensure the total does not exceed two years’ basic salary
Example 1 | 4 Years of Service
📋 Example Calculation
- 1Basic Salary: AED 10,000/month
- 2Daily Wage: 10,000 ÷ 30 = AED 333.33
- 3Gratuity: 333.33 × 21 days × 4 years = AED 28,000
- ✓Total Gratuity = AED 28,000
Example 2 | 7 Years of Service
📋 Example Calculation
- 1Basic Salary: AED 12,000/month
- 2Daily Wage: 12,000 ÷ 30 = AED 400
- 3First 5 years: 400 × 21 × 5 = AED 42,000
- 4Next 2 years: 400 × 30 × 2 = AED 24,000
- ✓Total Gratuity = AED 66,000
Use the gratuity calculator at the top of this page to instantly compute your amount – no manual calculation needed.
Gratuity for Limited vs Unlimited Contract in UAE
The type of employment contract you have directly affects how your end of service gratuity is calculated – particularly when you resign.
Limited Contract (2026)
Under the new UAE labour law, all employment contracts are fixed-term (limited). If you resign or are terminated, you receive:
- 21 days’ basic salary per year for the first 5 years
- 30 days’ basic salary per year for each year beyond 5 years
- No deduction for resignation under current law
Unlimited Contract (Old System)
Employees still on older unlimited contracts face a resignation scale:
- 1–3 years service → ⅓ (33.3%) of gratuity
- 3–5 years service → ⅔ (66.6%) of gratuity
- 5+ years service → Full gratuity
If terminated under unlimited contract: full gratuity from 1 year of service.
Not sure which contract you have? Read our full guide on limited vs unlimited contracts in UAE to understand the difference. Our gratuity calculator for UAE handles both contract types automatically.
What Counts as Basic Salary for Gratuity in UAE?
One of the most common mistakes when using a settlement calculator UAE is entering the wrong salary figure. Gratuity is calculated on basic salary only – not your total package or gross pay.
| Salary Component | Included in Gratuity Calculation? |
|---|---|
| Basic Salary | ✅ Yes – primary basis |
| Housing Allowance | ❌ No |
| Transportation Allowance | ❌ No |
| Food / Meal Allowance | ❌ No |
| Medical Allowance | ❌ No |
| Overtime Pay | ❌ No |
| Annual Bonus / Commission | ❌ No |
| Utility Allowance | ❌ No |
Your basic salary is the fixed amount stated in your labour contract – before any allowances are added. If unsure, refer to your MOHRE-registered employment contract or payslip.
How to Calculate Final Settlement in UAE
Your final settlement UAE is more than just gratuity. It is the total of all outstanding payments owed to you when you leave a job.
All salary up to your last working day
Unused leave days paid out at daily rate
Calculated per UAE Labour Law formula
If applicable and not served in full
Any outstanding reimbursements
Lawful deductions such as outstanding loans
How to Calculate Annual Leave Salary in UAE
Unused annual leave is calculated as: (Daily basic salary × Unused leave days). UAE law entitles employees to 30 calendar days of paid leave per year after completing one year of service. Some companies now offer an alternative end-of-service savings scheme instead of the traditional gratuity model.
Gratuity Eligibility in UAE | Who Qualifies?
Not every employee automatically receives gratuity. Understanding the gratuity rule in UAE helps you know exactly where you stand before you leave.
Does Unpaid Leave Affect Gratuity?
Yes. Under UAE labour law for gratuity, unpaid leave days are subtracted from your total service period when calculating gratuity. For example, if you took 60 days of unpaid leave during a 4-year tenure, your gratuity would be based on approximately 3 years and 10 months of actual service.
However, paid leave (annual leave, sick leave, maternity leave) does not reduce your gratuity entitlement.
Freezone Gratuity Calculator | UAE Free Zone Rules
Most UAE free zones follow the same end of service gratuity formula as the mainland under Federal Decree-Law No. 33 of 2021. This includes major zones like JAFZA, DMCC, Dubai South, and Sharjah free zones. You can explore the full list of free zones in UAE to check which category applies to you.
DIFC & ADGM: Different Rules Apply
The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) operate under their own employment laws and use a pension-style savings scheme (DEWS) instead of the standard gratuity formula. Check with your HR if you work in these zones.
Our JAFZA gratuity calculator and other location-specific tools apply the correct rules for your zone. Employees working in Dubai free zones should also review zone-specific rules before calculating their gratuity. Select your emirate below for a tailored calculation.
What to Do If Your Employer Refuses to Pay Gratuity
Under UAE law, employers must pay all end of service benefits in UAE within 14 days of the employee’s last working day. If your employer delays or refuses, you have clear legal remedies.
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1
Contact HR in Writing Send a formal email or letter requesting your full settlement breakdown and payment timeline. You can use our sample letter to claim gratuity in UAE as a ready-made template.
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2
File a Complaint via MOHRE App Download the MOHRE app or visit mohre.gov.ae to file an official labour complaint. The process typically takes 14–21 days.
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3
Call the MOHRE Hotline Dial 600 590 000 to speak with a labour officer directly about your case.
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4
Escalate to Labour Court If MOHRE mediation fails, your case is referred to the labour court. Employers who fail to pay face fines, suspension from hiring, and legal penalties.
Employer Obligations Under UAE Law
Employers cannot force employees to sign “no claim” letters or waiver agreements in exchange for gratuity. Such waivers are unenforceable under UAE Labour Law. You always retain the right to claim your full entitlement.
Gratuity Calculator by UAE Location
Our location-specific calculators are tailored to local free zone rules and regulations. Whether you need a gratuity calculator Dubai or an Abu Dhabi-specific tool, we have you covered across all seven emirates. We also offer a dedicated gratuity calculator for domestic workers in UAE, which follows a separate calculation rule under UAE Domestic Workers Law.
Frequently Asked Questions | UAE Gratuity
Here are the most common questions about gratuity calculation in UAE, answered clearly based on the latest MOHRE guidelines.
To calculate gratuity in UAE: Divide your basic salary by 30 to get your daily wage. Then multiply by 21 days for each year of the first 5 years of service. For every year beyond 5, multiply by 30 days instead. Add both amounts for your total gratuity. The total cannot exceed two years’ basic salary.
To compute your UAE gratuity: 1) Confirm your basic salary (exclude all allowances), 2) Divide by 30 to get daily wage, 3) Multiply by 21 × years served (up to 5), 4) Add 30 × additional years beyond 5. Use our free gratuity calculator above for an instant result.
The UAE gratuity calculation formula is: Gratuity = (Basic Salary ÷ 30) × 21 days × Years for the first 5 years, and (Basic Salary ÷ 30) × 30 days × Additional Years for years beyond 5. Maximum is capped at 2 years’ total basic salary.
For unlimited contracts, if you resign: 1–3 years = ⅓ of gratuity, 3–5 years = ⅔ of gratuity, 5+ years = full gratuity. If you are terminated, full gratuity applies from 1 year of service regardless.
Your total end of service settlement includes: unpaid salary + annual leave encashment + end of service gratuity + notice period pay (if applicable) − any lawful deductions. The gratuity portion alone follows the 21/30 day formula based on basic salary and years served.
The maximum gratuity payable in the UAE is 2 years’ total basic salary. Even if your calculated gratuity exceeds this amount based on years of service, UAE Labour Law caps it at this figure.
Gratuity in UAE is calculated on basic salary only. Housing, transport, food, utility, overtime, and bonus payments are all excluded from the gratuity calculation. Always use the basic salary figure from your labour contract.
If you leave before completing 1 full year of continuous service – whether by resignation or termination – you are not entitled to any gratuity under UAE Labour Law. The 1-year minimum applies to both limited and unlimited contracts.
UAE employers are legally required to pay all end of service entitlements, including gratuity, within 14 days of the employee’s last working day. If payment is delayed, file a complaint via the MOHRE app or call 600 590 000.
You can estimate your gratuity using our free online UAE gratuity calculator above. For official records, request a gratuity statement from your company’s HR department, or check your MOHRE contract details via the MOHRE app. You can also call MOHRE on 600 590 000 for guidance.