UAE Gratuity Calculator
Updated November 2026 · Free · No sign-up
Calculate your UAE gratuity (end of service benefits) under the current Labour Law — 21 days of basic salary per year for the first five years, 30 days after, full entitlement on resignation, and the two-year-salary cap.
Quick answer: UAE gratuity = 21 days of basic salary per year (first 5 years) + 30 days per year beyond, using basic ÷ 30 as the daily rate — payable in full after 1 year of service whether you resign or are terminated (Federal Decree-Law 33/2021), capped at 2 years of basic salary. 7 years on AED 10,000 basic = AED 55,000.
The Current Formula (Federal Decree-Law 33/2021)
Daily wage = monthly BASIC ÷ 30. Then:
- Years 1-5: 21 days of basic per year (0.7 month/year)
- Beyond 5: 30 days per year (1 month/year)
- Partial years prorate by days; total capped at 24 months of basic.
The 2022 law abolished the old resignation reductions — the 1/3-2/3 haircuts for resigning within 1-3/3-5 years are gone for the private sector; full gratuity applies after one year of service regardless of who ends the contract. (Sites still showing the old sliding scale are describing the repealed 1980 law.)
Worked Examples
Example 1 — 7 years, AED 10,000 basic. First 5: 5 × 21 × (10,000/30) = 35,000. Next 2: 2 × 30 × 333.33 = 20,000. Total AED 55,000.
Example 2 — 3.5 years, resignation. 3.5 × 21 × 333.33 = AED 24,500 — in full; under the old law a resignation here would have paid 2/3. The post-2022 difference is real money.
Example 3 — the allowance trap. AED 18,000 package structured as 6,000 basic + 12,000 allowances: gratuity rides ONLY the 6,000 → 7 years pays AED 33,000, not 99,000. Basic-salary percentage is THE contract negotiation for expats — this is why offers with identical totals differ by lakhs at exit.
Example 4 — under one year. 11 months: zero gratuity — the 1-year threshold is absolute.
Rules That Decide Real Cases
| Rule | Detail |
|---|---|
| Base | Last drawn BASIC salary — allowances, commissions (unless contractual basic), bonuses excluded |
| Unpaid leave | Days of unpaid absence don't count toward service |
| Cap | Total gratuity ≤ 2 years' basic salary |
| Termination for cause | The old automatic forfeiture narrowed — deprivation now needs the legal process, not employer say-so |
| Payment deadline | All end-of-service dues within 14 days of the end date |
| Free zones | Most follow the federal law; DIFC/ADGM run their own funded schemes (DEWS-style contributions instead of gratuity) |
DIFC/ADGM Exception
DIFC replaced gratuity with DEWS — employer contributions (5.83% of basic for <5 years, 8.33% beyond) into a funded plan monthly, so there's no end-of-service lump sum calculation; ADGM mirrors it. Mainland and most free zones (JAFZA, DMCC...) still use the formula on this page. The federal government has piloted an optional funded "savings scheme" alternative for mainland employers — if your employer enrolled, your money grows in a fund instead of accruing as the formula.
Maximizing and Protecting Your EOSB
- Negotiate basic %: 50-60% basic is reasonable; 30% structures quietly cost you ~40% of gratuity (and air tickets/leave salary computed on basic).
- Raises count fully: gratuity uses the LAST basic — late-career raises retroactively upgrade every prior year.
- Document unpaid-leave accounting — employers sometimes over-deduct service days.
- Disputes: MOHRE complaint first (free, fast conciliation) — the final settlement calculator totals everything owed in the 14-day window.
Frequently Asked Questions
How is gratuity calculated in the UAE?
21 days of basic salary per year for the first five years, 30 days per year after — daily rate = basic ÷ 30, prorated for partial years, capped at two years' basic.
Do I get full gratuity if I resign in the UAE?
Yes — since Federal Decree-Law 33/2021 (Feb 2022), resignation after 1+ year of service earns FULL gratuity; the old 1/3 and 2/3 reductions are repealed.
Is gratuity calculated on basic or gross salary?
Basic only — housing, transport, and other allowances are excluded, which is why the basic-salary percentage in your contract matters enormously.
What is the minimum service for UAE gratuity?
One year of continuous service — below it, no gratuity. Unpaid leave days don't count toward service.
When must gratuity be paid?
Within 14 days of the employment end date, together with all other end-of-service entitlements.
Does DIFC use the same gratuity formula?
No — DIFC (and ADGM) replaced gratuity with funded monthly contributions (DEWS: 5.83%/8.33% of basic). Mainland and most free zones use the 21/30-day formula.
✓ Formula verified • Last updated: November 3, 2026