UAE Gratuity Calculator - Calculate End of Service Benefits
Free calculator to estimate UAE end-of-service gratuity based on labor law for 2025 with instant accurate results
UAE Gratuity Calculator 2025
Results
What is a UAE Gratuity Calculator?
A UAE Gratuity Calculator is a free financial tool that helps employees calculate their end-of-service gratuity benefits based on UAE labor law. It automatically computes the gratuity amount based on basic salary, years of service, and employment termination type, following the official UAE Ministry of Human Resources and Emiratisation regulations.
This calculator is essential for:
- Financial planning - Estimate your end-of-service benefits before resignation
- Career decisions - Understand gratuity impact when considering job changes
- Negotiation preparation - Know your entitlements during employment discussions
- Retirement planning - Calculate total gratuity for long-term financial goals
- Dispute resolution - Verify employer calculations with accurate gratuity amounts
For calculating other Middle East employment benefits, use our Salary Calculator to determine your comprehensive compensation package including allowances and benefits.
To understand take-home pay after deductions in different regions, explore our Paycheck Calculator for detailed net salary calculations with all applicable deductions.
For evaluating total annual compensation including gratuity, check our Annual Income Calculator to see the complete financial picture of your employment.
To calculate bonus payments and incentives common in UAE employment, try our Bonus Tax Calculator for understanding total compensation packages.
For comparing salary offers and understanding hourly rates, use our Salary to Hourly Calculator to convert between different pay structures.
How UAE Gratuity Calculator Works
The calculation follows UAE Federal Decree-Law No. 33 of 2021 (UAE Labor Law):
Daily Basic Salary
Daily Salary = (Monthly Basic Salary × 12) ÷ 365
First 5 Years of Service
Gratuity = Daily Salary × 21 days × Years of Service
For each year of the first 5 years, you earn 21 days of basic salary
Service Beyond 5 Years
Additional Gratuity = Daily Salary × 30 days × (Years - 5)
For each year beyond 5 years, you earn 30 days of basic salary
Resignation Reduction (Less than 5 Years)
Less than 1 year: 0% (no gratuity)
1-3 years: 30% of calculated gratuity
3-5 years: 70% of calculated gratuity
More than 5 years: 100% (full gratuity)
Maximum Gratuity Cap
Maximum = 2 years of basic salary (24 months)
The calculator automatically applies reductions for early resignation and ensures the total gratuity doesn't exceed the legal maximum of 2 years of basic salary.
Key Concepts Explained
Basic Salary vs Total Salary
Basic salary is the fixed monthly wage excluding allowances. Gratuity is calculated only on basic salary, not on housing allowance, transport allowance, or other benefits. Ensure you use only the basic salary component for accurate calculations.
21 Days vs 30 Days Rule
UAE labor law provides different rates based on service length. First 5 years earn 21 days of basic salary per year, while years beyond 5 earn 30 days per year. This progressive structure rewards longer service with higher gratuity rates.
Resignation vs Termination
If you resign before completing 5 years, you receive reduced gratuity (0%, 30%, or 70% depending on tenure). If terminated by employer (not for misconduct) or if you complete 5+ years, you receive full gratuity regardless of who ends employment.
Two-Year Maximum Cap
UAE law caps total gratuity at 2 years of basic salary (24 months). Even if your calculation exceeds this amount based on long service, the maximum payable gratuity is limited to 24 times your monthly basic salary.
How to Use This Calculator
- Enter monthly basic salary - Input only the basic salary component in AED, excluding all allowances like housing, transport, or other benefits
- Select employment end type - Choose "Resigned" if you're leaving voluntarily, or "Terminated" if employer is ending employment (affects calculation for service under 5 years)
- Enter years of service - Input complete years worked from your employment start date to end date (e.g., if you worked from Jan 2019 to Jan 2024, enter 5 years)
- Enter additional months - Add any extra months beyond complete years (e.g., if you worked 5 years and 6 months, enter 6 in this field)
- Click Calculate - View your total gratuity amount, breakdown by service period, and applicable reductions instantly
- Review the breakdown - Check gratuity for first 5 years vs beyond 5 years, any reductions applied, and whether you've reached the maximum cap
- Verify with employer - Use this calculation to verify your actual gratuity payment matches UAE labor law requirements
Benefits of Using This Calculator
- Accurate UAE labor law compliance - Calculations follow Federal Decree-Law No. 33 of 2021 with exact gratuity formulas and reduction percentages
- Financial planning precision - Know exact gratuity amount for budgeting major purchases, investments, or relocation expenses when changing jobs
- Career decision support - Compare gratuity benefits at different tenure milestones to make informed decisions about when to change employers
- Instant calculations - Get immediate results without manual calculations or waiting for HR department responses
- Resignation timing insights - Understand how staying an extra few months can significantly increase gratuity, especially near the 1, 3, or 5 year marks
- Dispute prevention - Verify employer gratuity calculations to ensure you receive full entitlements as per UAE law before accepting final settlement
Factors That Affect Your Results
- Basic salary amount - Higher basic salary directly increases gratuity. Ensure your employment contract clearly defines basic salary vs allowances for accurate gratuity calculation
- Length of service - Crossing the 5-year threshold increases daily rate from 21 to 30 days per year, significantly boosting gratuity for long-term employees
- Resignation vs termination - Resigning before 5 years reduces gratuity to 0%, 30%, or 70% based on tenure, while termination or 5+ years service earns full 100% gratuity
- Service period milestones - Completing exactly 1, 3, or 5 years dramatically changes gratuity from 0% to 30%, 70%, or 100% respectively for resignation cases
- Partial year calculation - Additional months beyond complete years are calculated proportionally, so staying an extra few months before the 5-year mark can increase gratuity
- Maximum cap limit - Very long service (15+ years) may hit the 2-year salary cap, meaning additional years won't increase gratuity beyond 24 months of basic salary
Frequently Asked Questions
How is UAE gratuity calculated?
UAE gratuity is calculated based on your basic salary and length of service. For 1-5 years of service, you receive 21 days of basic salary per year. For service beyond 5 years, you receive 21 days for the first 5 years plus 30 days per year for each additional year. Total gratuity cannot exceed 2 years of basic salary.
What is the difference between resignation and termination for gratuity?
If you resign before completing 5 years of service, you may receive reduced gratuity: no gratuity for less than 1 year, 30% of full gratuity for 1-3 years, and 70% for 3-5 years. After 5 years, you receive full gratuity regardless of resignation or termination. If terminated by employer, you typically receive full gratuity.
Is gratuity calculated on basic salary or total salary?
UAE gratuity is calculated only on basic salary, not on total salary including allowances. Basic salary is the fixed component of your salary package, excluding housing allowance, transport allowance, and other benefits. This is why it's important to know your basic salary breakdown.
What is the maximum gratuity you can receive in UAE?
The maximum gratuity payment in UAE is capped at 2 years of basic salary, regardless of how long you've worked for the company. For example, if your monthly basic salary is AED 10,000, the maximum gratuity you can receive is AED 240,000 (2 years × 12 months × AED 10,000).
Do I get gratuity if I resign before 1 year in UAE?
No, according to UAE labor law, employees who complete less than 1 year of continuous service are not entitled to receive any gratuity payment. You must complete at least one full year of service to be eligible for gratuity benefits.
How is partial year service counted for gratuity?
Partial years of service are calculated proportionally. If you've worked for 3 years and 6 months, the 6 months is calculated as 0.5 years. The gratuity for the partial year is calculated at the same rate as complete years (21 days per year for first 5 years, or 30 days per year after 5 years).