How is UAE gratuity calculated?

Under the UAE Labour Law you earn 21 days of basic salary for each of the first five years of service and 30 days of basic salary for each year beyond five. A daily wage is your monthly basic pay divided by 30, and part-years are paid pro-rata. The total is also capped at two years' basic pay.

Is gratuity based on basic salary or total salary?

Only the basic salary counts. Allowances such as housing, transport and other benefits are excluded, so a contract with a low basic and high allowances produces a smaller gratuity even at the same total package.

Do I get gratuity if I resign?

You must complete at least one year of continuous service to receive any gratuity. Under the older unlimited-contract rules, resigning between one and five years reduced the benefit on a sliding scale; the current 2022 law generally pays full accrued gratuity on resignation, but early-resignation reductions can still apply depending on your contract type.

Is there a maximum gratuity in the UAE?

Yes. Total end-of-service gratuity is capped at the equivalent of two years' basic salary, no matter how long you have worked. Very long-tenured employees therefore stop accruing once they hit that ceiling.

Does this calculator store my data?

No. Everything is computed locally in your browser and nothing is uploaded, so your salary details stay private.

UAE Gratuity / End-of-Service Calculator

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This UAE gratuity calculator works out the end-of-service benefit you are owed under the UAE Labour Law: 21 days of basic pay per year for the first five years, and 30 days per year after that, pro-rated for part-years and capped at two years’ basic salary. It calculates on basic pay only, and adjusts for whether you were terminated or resigned.

How it works

Your daily wage is monthly basic ÷ 30. Service is converted to total years (including months as a fraction). Then:

first 5 years: up to 5 × 21 days × daily wage
beyond 5 years: (years − 5) × 30 days × daily wage

The two parts are summed, then the two-year cap (24 months of basic pay) is applied. A minimum of one completed year of service is required for any gratuity; under the older unlimited-contract regime, resignation between one and five years applied a sliding reduction (1/3 for 1–3 years, 2/3 for 3–5 years, full thereafter), which this tool can model for legacy contracts.

Example

Basic salary AED 10,000, service 7 years, terminated. Daily wage = 10,000 ÷ 30 = AED 333.33. First 5 years: 5 × 21 × 333.33 = AED 35,000. Next 2 years: 2 × 30 × 333.33 = AED 20,000. Total = AED 55,000, well under the 24-month cap of AED 240,000.

Notes

Gratuity rules differ between the older unlimited/limited contracts and the 2022 fixed-term regime, and free zones such as DIFC and ADGM run their own end-of-service schemes (some funded monthly). Unpaid leave and contractual definitions of “basic” can change the figure. Use this as an estimate and confirm against your contract and a labour-law adviser.