Gratuity Calculator Ajman UAE 2025 Updated by MOHRE

Ajman employees, whether in the private sector, a free zone, or working as domestic helpers, are entitled to end-of-service benefits (gratuity) according to UAE law. Gratuity is a lump-sum payment every qualifying worker receives at the end of employment, calculated based on their length of service and final salary. 

This blog post explains how gratuity is computed for Ajman workers under the 2025, with sector-specific details for private sector, free zone, and domestic workers. We also highlight how our Gratuity Calculator UAE tool provides quick and lawful estimates, so you can confidently know what you’re owed when your service ends.

Gratuity Entitlement Under UAE Labour Law (2025)

Under the UAE Labour Law 2025, which governs Ajman’s private and free zone employment, workers become eligible for gratuity after completing at least one continuous year of service​. Gratuity is calculated only on the basic salary (excluding allowances like housing, transport, etc.) that the worker was earning at the end of employment​. This ensures that only the core salary amount is used for the end-of-service benefit calculation, making the process fair and consistent. Importantly, all accrued end-of-service benefits must be paid out within 14 days of the employee’s last working day as per the law​.

How Gratuity is Calculated for Ajman’s Private Sector

For private sector employees in Ajman, gratuity is computed according to a straightforward formula set by law. The rules below outline the entitlement structure for end-of-service gratuity​:

• Less than 1 year of service: No gratuity is payable if an employee’s tenure is under one year (this is the minimum qualifying period under the law​).
  
• 1 to 5 years of service: The employee is entitled to 21 days of basic pay for each year of service​. For example, if your basic wage is AED 3,000 per month and you worked 3 years, your gratuity would be 21 days * 3 (years) of pay.
  
• More than 5 years of service: The employee is entitled to 30 days of basic pay for each additional year after the first five years​. In other words, for the first five years you still receive 21 days per year, and for every year beyond five, you accrue 30 days per year.
  
• Maximum limit (cap): No matter how long the service, the total gratuity amount cannot exceed the equivalent of two years’ worth of basic salary​ as a maximum cap set by law.
  

These provisions apply uniformly across the UAE, so Ajman’s private sector employees enjoy the same gratuity benefits as those in other emirates. Notably, recent updates to UAE law have removed the earlier reductions on gratuity that used to apply if an employee resigned before a certain number of years. 

Now, whether you resign or are terminated (provided it’s not for gross misconduct), you are entitled to the full gratuity calculation as per the rules above. Employers must also settle any due gratuity promptly; failing to do so can lead to legal penalties. This standardized approach gives Ajman workers confidence that their end-of-service benefit is protected by law and calculated fairly.

Gratuity for Free Zone Employees in Ajman

Ajman is home to free zone areas (such as Ajman Free Zone and others) where companies operate under special regulations. Free zone employees in Ajman are generally covered by the federal labour law framework for end-of-service benefits, meaning their gratuity is calculated in the same way as the regular private sector described above. 

Free zone authorities in the UAE adhere to the national labour law or have harmonized rules to ensure workers receive their lawful gratuity. This means that if you work for a company in an Ajman free zone, you still become eligible for gratuity after one year of service and accumulate 21 days’ pay per year (and 30 days for each year beyond five years), just like any other employee​.

It’s important for free zone employees to check their employment contract and the specific free zone guidelines, but in practice Ajman free zones follow the UAE Labour Law 2025 for end-of-service gratuity. The calculation is based on your basic salary at the end of your contract and respects the same one-year minimum service requirement and the two-year salary cap on the payout. 

In Ajman’s free zones, end-of-service settlements are processed through the free zone’s HR department or authority, but the outcome (the gratuity amount) remains aligned with federal law. This consistency ensures that all expatriate workers in Ajman, whether in a mainland company or a free zone company; are treated equitably when their service ends.

Gratuity and End-of-Service Rules for Domestic Workers in Ajman

Gratuity rules for domestic workers in Ajman (and the UAE in general) differ from those of other sectors. Domestic workers, such as housemaids, nannies, drivers, cooks, and other household staff, are governed by a separate law (the UAE Domestic Workers Law) rather than the standard labour law. 

Notably, gratuity calculation for domestic workers in UAE is not explicitly guaranteed under the current law. The previous law (Federal Law No. 10 of 2017) did outline a gratuity entitlement for domestic helpers, but the new law (Federal Decree Law No. 9 of 2022) that came into effect in late 2022 removed any specific gratuity provision​. 

Instead, the law left it to a future Cabinet decision to establish rules for domestic workers’ end-of-service benefits​. As of 2023, the UAE Cabinet issued a resolution (Cabinet Resolution No. 106 of 2022) regarding domestic workers, but it did not introduce any new gratuity entitlement​.

Eligibility for Gratuity in Ajman

Not every employee automatically qualifies for gratuity. The UAE Labour Law outlines specific conditions that must be met:

Eligibility Criterion	Details
Minimum Service Period	Employees must complete at least one year of continuous service with the same employer. Continuous service excludes unpaid leave or unauthorized absences.
Contract Type	Both limited (fixed-term) and unlimited (open-ended) contracts qualify, but the calculation method varies based on contract type and termination circumstances.
Termination or Resignation	Gratuity is payable upon resignation, termination, or non-renewal of the contract, except in cases of dismissal under Article 44 (e.g., gross misconduct).
Unpaid Leave	Days of unpaid leave are not counted in the service period, potentially reducing the gratuity amount.
Applicability	Both UAE nationals and expatriates are eligible, provided they meet the criteria.

. Employees who resign under an unlimited contract before completing one year or fail to serve the required notice period may forfeit their gratuity entitlement. Similarly, termination for reasons outlined in Article 44, such as assault or failure to perform duties, may disqualify an employee from receiving gratuity.

Step-by-Step Gratuity Calculation Method 

1. Determine the Basic Salary: Identify the employee’s last drawn basic salary (excluding allowances).
2. Calculate Daily Wage: Divide the basic salary by 30 to get the daily wage. 

$$Daily\;Wage\;=\frac{Basic\;Salary}{30}$$

3. Apply Service Years:
   • For years 1–5: Multiply the daily wage by 21 days for each year.
   • For years beyond 5: Multiply the daily wage by 30 days for each additional year.
4. Account for Partial Years: For incomplete years, calculate gratuity on a pro-rata basis.
5. Sum the Total: Add the gratuity for all years, ensuring it does not exceed two years’ basic salary.

Example Calculation

Consider an employee in Ajman with the following details:

Detail	Value
Basic Salary	AED 6,000 per month
Years of Service	7 years and 4 months
Contract Type	Limited contract

Step 1: Calculate Daily Wage

$$Daily\;Wage\;=\frac{60000}{\;30}=\;AED\;200$$

Step 2: Calculate Gratuity for First 5 Years

$$Gratuity\;for\;5\;years\;=\;5\times\left(200\times21\right)=\;5\times4200=AED\;21,000$$

Step 3: Calculate Gratuity for Additional Years

• 7 years total means 2 years qualify for 30 days’ salary.

$$Gratuity\;for\;2\;years\;=\;2\times\left(200\times30\right)=\;2\times6000=AED\;`12,000$$

Step 4: Calculate Pro-Rata Gratuity for 4 Months

• $$4\;months\;=\;\frac4{12}=0.333\;years$$
• For years beyond 5, use 30 days’ salary.

$$Pro-Rata\;Gratuity=\;0.333\times\;(200\times30)=0.333\times6,000=AED\;1,998$$

Step 5: Total Gratuity

$$Total\;Gratuity=\;21,000+12,000+1,998=AED\;34,998$$

Step 6: Check Maximum Cap

• $$Two\;years’\;basic\;salary\;=\;6,000\times24=AED\;144,000$$
• Since AED 34,998 is less than AED 144,000, the gratuity is valid.

Special Cases

Certain scenarios require adjustments to the standard gratuity formula:

Scenario	Details
Unlimited Contracts (Resignation)	– 1–3 years: 1/3 of full gratuity (7 days’ salary/year).- 3–5 years: 2/3 of full gratuity (14 days’ salary/year).- After 5 years: Full gratuity (same as limited contract).
Termination	– 1–5 years: 21 days’ salary/year.- After 5 years: 21 days for the first 5 years, 30 days thereafter.
Domestic Workers	Calculated under Domestic Labour Law, which may differ.
Part-Time Employees	Proportional to working hours or salary, calculated pro-rata.

Ensuring Accuracy and Compliance in Gratuity Calculations

Whether you work for a company or a household in Ajman, it’s crucial to maintain accurate records of your employment details to ensure the gratuity (or any end-of-service benefit) is calculated correctly. Employers and employees alike should keep track of the start date of employment, the basic salary amount (excluding allowances), and any interruptions in service. 

Every official worker in the UAE is issued a UAE Labour Card (work permit) which contains key details like the job title, employer, and employment dates. Verifying the information on this card can help avoid disputes when calculating your gratuity. 

Employers, on the other hand, use digital tools like the E-signature Card system to manage labor contracts and transactions with the Ministry of Human Resources and Emiratisation (MOHRE). These modern systems ensure that when a contract is terminated or a worker’s service ends, all the documentation is signed and processed electronically, reducing errors and making sure that the gratuity calculation complies with the latest legal requirements.

Both parties should also be aware of any cause that might disqualify a gratuity payment. For instance, if an employee is terminated for a serious disciplinary reason (as defined by law), the employer may have grounds to forfeit the gratuity. 

Conclusion 

Calculating gratuity in Ajman is a straightforward process when you understand the eligibility criteria, formulas, and nuances of limited and unlimited contracts. Our Online gratuity calculators offer a convenient way to estimate entitlements, but always verify with UAE Labour Law or consult professionals for accuracy. Whether you’re an employee planning your financial future or an employer ensuring compliance, mastering gratuity calculation is a step toward financial clarity and workplace fairness in Ajman.