End of service gratuity in the UAE accrues at 21 days of basic salary for each of the first five years, and 30 days of basic salary for each year after that, calculated on your last basic salary and capped at two years’ total wage. You qualify after one year of continuous service, and since 2022 resigning no longer reduces what you are owed.
UAE gratuity calculator
Enter your basic salary — not your total package. Allowances, commission and overtime are excluded by law.
Indicative only. Unpaid leave, contractual terms more generous than the statutory minimum, and disputed terminations all change the answer. It is not a substitute for advice on a specific case.
How gratuity is calculated in the UAE
The calculation itself is arithmetic. Where it goes wrong is almost always in the inputs.
- Take the last basic salary, not the gross package. If your contract says AED 15,000 total with AED 9,000 basic, the calculation runs on 9,000.
- Divide by 30 to get a daily rate. The law works in days, not months.
- Multiply by 21 for each of the first five years of service.
- Multiply by 30 for each year beyond five.
- Cap the total at two years’ total wage. This rarely bites, but it does on very long service.
A worked example
Basic salary AED 10,000, seven years of service. Daily rate is AED 333.33. The first five years give 105 days, the remaining two give 60 days, so 165 days in total. Gratuity is roughly AED 55,000. Note that the same employee at three years would receive 63 days — about AED 21,000 — because the higher accrual rate only starts after year five.
The rules that decide your entitlement
You need one year of continuous service
Below twelve months, no gratuity is payable. Above it, partial years are paid pro rata — there is no rounding down to a whole year.
Basic salary only
Housing, transport, commission, overtime and bonuses are excluded. This is why two employees on the same package can receive very different gratuity, and why the basic-to-allowance split in a contract matters more than most people notice when they sign it.
Resignation no longer costs you
Under the old law, resigning before five years cut your gratuity to a third or two-thirds. Federal Decree-Law No. 33 of 2021 removed that. An employee who resigns after two years now receives the same accrual as one who is dismissed. A great deal of outdated guidance online still describes the old rules, which is worth knowing if you are checking a figure against an article.
Limited and unlimited contracts no longer exist
All private sector contracts are now fixed-term. If a calculator asks you to choose between limited and unlimited, it has not been updated since 2022 and its answer for a resignation will be wrong.
Payment is due within 14 days
The employer must settle final dues, including gratuity, within fourteen days of the contract ending.
What this means if you are the employer
Gratuity is a liability that accrues every month whether or not you record it. Under IFRS it should sit on your balance sheet as an end of service benefit provision, remeasured at each reporting date. A surprising number of UAE SMEs do not book it at all, which produces two problems.
The first is that your accounts overstate net assets, and an auditor will raise it. The second is a cash problem: a business with fifteen long-serving staff can be carrying a six-figure obligation it has never funded, and it becomes visible at the worst possible moment — a redundancy round, a sale, or a due diligence exercise.
If your bookkeeping does not currently carry an end of service provision, that is worth fixing before your next year end rather than after. Our payroll and WPS service tracks the accrual monthly so the number is never a surprise, and our guide to end of service gratuity for employers goes into the accounting treatment.
Frequently asked questions
Is this the same as the MOHRE gratuity calculator?
It applies the same statutory rules the MOHRE gratuity calculator uses — 21 days of basic salary per year for the first five years, 30 days per year after, capped at two years’ wage. Figures should agree. Where they differ, the cause is almost always unpaid leave or a different view of what counts as basic salary.
Does this work as a gratuity calculator for Dubai and Abu Dhabi?
Yes. End of service gratuity is federal law under the UAE Labour Law, so a gratuity calculator for Dubai, Abu Dhabi, Sharjah or any other emirate applies identical rules. There is no emirate-specific rate.
What about free zone employees — DDA, JAFZA or DMCC?
Most free zones apply the federal end of service rules, so a DDA gratuity calculator or a JAFZA gratuity calculator gives the same answer as this one. DIFC and ADGM are the genuine exceptions: they operate their own employment regimes, DIFC through a workplace savings scheme, so check your specific contract if you are employed there.
How do I compute gratuity for 2 years of service?
Two years accrues 42 days of basic salary — 21 days for each year. On AED 10,000 basic that is about AED 14,000. Enter your own figures above for an exact result.
How is gratuity computed for a limited or unlimited contract?
That distinction no longer exists. All private sector contracts became fixed-term under the 2022 reforms, and the old rules that cut gratuity for resigning under an unlimited contract were removed. Any calculator still asking you to choose is out of date.
How do I calculate gratuity in the UAE?
Divide your last basic monthly salary by 30 to get a daily rate, multiply by 21 days for each of the first five years of service and 30 days for each year after that, then cap the result at two years’ total wage. The calculator above does this for you.
Is gratuity calculated on basic salary or gross salary?
Basic salary only. Allowances, commission, overtime and bonuses are excluded by law.
Do I get gratuity if I resign?
Yes. Since Federal Decree-Law No. 33 of 2021, resignation does not reduce your gratuity provided you have completed at least one year of continuous service. Older articles saying otherwise are out of date.
What is the gratuity for 3 years in the UAE?
Sixty-three days of basic salary — three years at 21 days each. On a basic salary of AED 10,000 that is roughly AED 21,000.
What is the gratuity for 5 years in the UAE?
105 days of basic salary. The 30-day rate applies only to service beyond five years, so year six is the first year that accrues at the higher rate.
Is there a maximum gratuity in the UAE?
Yes. Total gratuity cannot exceed two years’ total wage. On long service with a high basic salary, this cap can reduce the figure.
When must gratuity be paid?
Within fourteen days of the end of the contract, together with any other final dues.
Do UAE nationals receive gratuity?
UAE and GCC nationals are covered by the pension and social security system rather than the end of service gratuity regime, so the calculation above applies to expatriate employees.
Does unpaid leave count towards service?
Generally no. Periods of unpaid leave are usually excluded from the service calculation, which is one of the common reasons a calculator figure and an employer figure differ.