meta_description: Top Professional jobs in Location. See available roles, compensation packages, and career growth options.
title: “UAE Gratuity Calculator 2026: How to Calculate Your End of Service Payment”
meta_title: “UAE Gratuity Calculator 2026: End of Service Guide”
meta_description: “Calculate your UAE gratuity payment with our 2026 guide. Learn the exact formula, resignation vs termination rules, and how to claim what you’re owed.”
focus_keyphrase: “gratuity calculator uae”
author: “DrJobPro Editorial Team”
date_published: “2026-05-12”
date_modified: “2026-05-12”
categories: [“UAE Jobs”, “Salary & Benefits”, “Labour Law”]
tags: [“gratuity calculator uae”, “end of service uae”, “uae labour law 2022”, “gratuity formula uae”, “end of service payment”]
UAE gratuity is calculated at 21 days of basic salary for each of your first 5 years of service, plus 30 days of basic salary for each year after that, and under the 2022 labour law update, you are entitled to the full amount whether you resign or are terminated. To find your exact figure, divide your basic monthly salary by 30 to get your daily rate, multiply by the number of days earned, and you have your gratuity. This guide walks you through the precise formula, a worked example, and exactly what to do if your employer underpays.
Key Takeaways
– UAE gratuity is based on basic salary only, housing, transport, and other allowances are excluded from the calculation
– The formula: 21 days per year for years 1–5; 30 days per year for year 6 onwards
– Under Federal Decree No. 33 of 2021 (effective February 2022), employees who resign receive full gratuity, the old partial-payment rules no longer apply
– Total gratuity is capped at 2 years of total salary
– Domestic workers are covered under a separate legal framework but are still entitled to gratuity
UAE Gratuity Formula Explained
The UAE gratuity formula is set out in Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relations, which replaced the old Labour Law No. 8 of 1980. The new law took effect on 2 February 2022 and changed the game significantly for employees.
Here is the official formula:
| Years of Service | Gratuity Rate |
|---|---|
| Year 1 to Year 5 | 21 days of basic salary per year |
| Year 6 onwards | 30 days of basic salary per year |
| Maximum total cap | 2 years of gross (total) salary |
The calculation uses your basic salary at the time of leaving, not your salary when you joined. If you received a raise during your employment, your gratuity is based on your final, higher basic salary for the entire period of service. That is an important detail many employees miss.
What counts as basic salary? Only the fixed base component of your pay. Your basic salary is the number stated on your employment contract as “basic” or “basic pay.” It does not include housing allowance, transport allowance, food allowance, overtime pay, commissions, bonuses, or any other benefit, even if those items appear on your regular payslip. If your contract only states a total salary with no breakdown, the entire amount may be treated as basic salary under UAE law, which is an argument many employees successfully make in labour disputes.
The daily rate formula is straightforward: divide your monthly basic salary by 30 (not by the actual number of days in the month). UAE labour law uses a 30-day month as the standard for gratuity calculations.
Formula summary:
- Daily rate = Basic monthly salary ÷ 30
- Gratuity for years 1–5 = Daily rate × 21 × number of years served (up to 5)
- Gratuity for years 6+ = Daily rate × 30 × number of years served (beyond 5)
- Total gratuity = Sum of both components (capped at 2 years gross salary)
For partial years of service, you receive prorated gratuity. If you worked for 3 years and 8 months, you get gratuity for 3 full years plus 8/12 of a year’s entitlement. No UAE employer can legally deny you gratuity for a partial year, even a short period of employment creates a gratuity entitlement.
Step-by-Step UAE Gratuity Calculation Example
Let’s work through a real example that shows how the two-tier formula works in practice.
Employee profile: Karim is an Egyptian civil engineer who has worked for a Dubai-based construction company for exactly 7 years. His basic monthly salary at the time of leaving is AED 10,000.
Karim had been watching his savings grow while planning his next move. He knew he was owed gratuity but had been told by a colleague that resignation would mean losing part of it. Under the old law, that was true. Under the current 2022 law, it is not. Karim is entitled to every dirham.
Step 1: Calculate the daily rate
Daily rate = AED 10,000 ÷ 30 = AED 333.33 per day
Step 2: Calculate gratuity for years 1–5
21 days × 5 years = 105 days
105 days × AED 333.33 = AED 35,000
Step 3: Calculate gratuity for years 6–7
30 days × 2 years = 60 days
60 days × AED 333.33 = AED 20,000
Step 4: Add both amounts
AED 35,000 + AED 20,000 = AED 55,000 total gratuity
| Component | Calculation | Amount (AED) |
|---|---|---|
| Daily rate | AED 10,000 ÷ 30 | 333.33 |
| Years 1–5 (21 days/yr) | 21 × 5 × 333.33 | 35,000 |
| Years 6–7 (30 days/yr) | 30 × 2 × 333.33 | 20,000 |
| Total gratuity | 55,000 |
Karim confirmed this figure with the HR department before his final day. Because he had his calculation ready and could cite the law, the process was smooth. He used the time to check salary data on DrJobPro and ensure his next role was paying market rate, the combination of his gratuity and new salary gave him a strong financial reset.
Partial year example: If Karim had worked for 7 years and 4 months instead of exactly 7 years, the extra 4 months would add: (30 days × 333.33 × 4/12) = AED 3,333 additional gratuity.
Resignation vs Termination, Gratuity Rules Under the 2022 Law
This is the section that matters most for employees weighing their options, and where the 2022 law made a fundamental change.
The Old Rules (Pre-February 2022)
Under the old Labour Law No. 8 of 1980, resignation came at a cost. Employees who resigned before completing 5 years of service received no gratuity at all. Those who resigned after 5 years received only a reduced amount. The system was designed to discourage job-hopping, but in practice it trapped employees in bad situations and gave employers enormous use.
Here is what employees received under the old law when they resigned:
- Less than 1 year of service: No gratuity
- 1 to 3 years: One third of the full gratuity amount
- 3 to 5 years: Two thirds of the full gratuity amount
- 5+ years: Full gratuity
The New Rules (February 2022 Onwards, Federal Decree No. 33 of 2021)
The 2022 law eliminated the resignation penalty entirely. Under the current law, every employee is entitled to full gratuity from day one of completing their first year of service, regardless of whether they resign or are terminated. There is no longer any distinction between resignation and termination for gratuity purposes.
The only scenario where gratuity is forfeited is if the employee is terminated for serious misconduct under Article 44 of the law, this covers cases such as fraud, physical assault, or revealing confidential company information. A standard performance-based termination or restructuring does not fall under this category.
The practical implication: If you are planning to resign from your UAE job and you have been on the fence because of gratuity concerns, those concerns no longer apply. You earn full gratuity whether you leave voluntarily or are let go.
David, a British operations manager at a logistics firm in Dubai, experienced this confusion firsthand. He had worked for his employer for 6 years when the company offered him a mutual agreement to leave as part of a regional restructuring. His HR team initially quoted him a “resignation gratuity” figure that was lower than the termination amount. David cross-checked using the 2022 law and pushed back, correctly pointing out that under the new legislation, the calculation is identical regardless of departure type. He received AED 68,000 rather than the AED 54,000 originally offered.
What Counts as Basic Salary for Gratuity Calculation?
Getting the basic salary figure right is the single most important part of the gratuity calculation, and it is where employers most commonly underpay, sometimes deliberately.
Included in basic salary for gratuity purposes:
- The fixed base salary stated on your employment contract
- Any fixed monthly allowance that is built into the contractual salary structure (if the contract does not separate it)
Excluded from basic salary for gratuity purposes:
- Housing allowance
- Transport allowance
- Food or meal allowance
- Phone and communication allowances
- Overtime pay
- Annual bonuses or performance incentives
- Commissions
- Medical insurance (even if cash-in-lieu)
The grey area: Some employment contracts in the UAE do not break down salary into components. The contract simply states “total salary: AED 15,000” with no further breakdown. In this scenario, UAE courts and the Ministry of Human Resources and Emiratisation (MOHRE) typically treat the full amount as basic salary for gratuity purposes. This benefits the employee significantly. If your contract is structured this way, do not accept a gratuity calculation based on a reduced “basic” figure that your employer invents after the fact.
If your contract does list a basic salary, make sure the figure used in your gratuity calculation matches exactly what appears on paper. Verify it against your most recent payslips. Then use the DrJobPro salary tool to confirm your total compensation package reflects market rates before accepting any new offer.
Gratuity for Part-Time and Domestic Workers in UAE
Part-Time Workers
Federal Decree No. 33 of 2021 formally recognized part-time employment contracts for the first time in UAE labour law. Part-time workers are entitled to gratuity on a prorated basis. The calculation uses the same formula, 21 days for the first 5 years, 30 days thereafter, but the daily rate is calculated based on the average daily earnings over the employment period.
If your hours vary week to week, your gratuity is based on your average daily wage across all working days during your tenure, not a fixed monthly salary divided by 30. This requires keeping payslip records for the full duration of employment. If records are missing, MOHRE can assist with the calculation using Wage Protection System (WPS) data.
Domestic Workers
Domestic workers, including housemaids, nannies, drivers, cooks, and gardeners employed by private households, are covered under a separate framework: Federal Law No. 10 of 2017 on Domestic Workers. This law grants domestic workers gratuity rights, but the structure differs slightly from the standard labour law.
Under Federal Law No. 10 of 2017, domestic workers are entitled to one month’s wage for each year of service as end-of-service gratuity, provided they have completed at least one year of continuous service. This is actually more straightforward than the tiered formula for regular employees, and in many cases works out more favourably.
Ana, a Filipino domestic worker who had spent 5 years as a live-in nanny in a Sharjah household, came up against an employer who claimed she was only owed two weeks’ pay per year because she was “not covered by UAE labour law.” Ana’s situation was not unusual, many domestic workers in the Gulf are not aware of their specific legal protections. The correct entitlement under Federal Law No. 10 of 2017 was one month’s salary per year: with a monthly wage of AED 2,000, she was owed AED 10,000 in gratuity. After filing a complaint through MOHRE’s domestic workers department, she received her full entitlement.
Domestic workers whose employers attempt to underpay can file complaints through MOHRE’s toll-free number (800-60) or the MOHRE mobile app. Resolution is typically faster than standard labour disputes.
How to Claim Unpaid Gratuity in UAE
If your employer refuses to pay gratuity, delays payment, or pays an amount you believe is incorrect, you have clear legal options. UAE law requires gratuity to be paid on or before the last day of employment or within a reasonable period thereafter.
Step 1: Document your entitlement
Before filing any complaint, calculate your exact gratuity using the formula above. Gather your employment contract, payslips showing your basic salary, your start date, and any official communication about your end date or termination letter. This paper trail is your case.
Step 2: Raise it internally in writing
Send a formal written request to your employer (HR department or direct manager) stating the exact amount owed, the legal basis (Federal Decree No. 33 of 2021, Articles 51–53 on end-of-service gratuity), and a deadline for payment. Keep a copy. Doing this by email creates a timestamp.
Step 3: File a complaint with MOHRE
If your employer does not respond or disputes the amount, file a complaint through:
- MOHRE’s online portal at **mohre.gov.ae**
- The MOHRE app (available on iOS and Android)
- Calling **800-60** (toll-free within UAE)
- Visiting any MOHRE service centre in person
MOHRE will attempt mediation within a short window (typically 2 weeks). If mediation fails, the case is referred automatically to the UAE Labour Court at no cost to the employee.
Step 4: Labour Court
Labour Court cases for gratuity disputes are handled relatively quickly in the UAE compared to other civil matters. Employees do not need to pay court fees for labour claims. If the court rules in your favour, the employer is typically ordered to pay the gratuity amount plus potential penalties. UAE courts consistently rule in employees’ favour when the law is clear and documentation is in order.
Important: You have a 1-year limitation period to file a labour complaint from the date your employment ended. Do not delay.
While navigating this process, it makes sense to line up your next opportunity in parallel. Browse UAE jobs on DrJobPro to find verified listings across all emirates while your claim is being processed. Set up job alerts on DrJobPro so the right roles reach you directly.
FAQs About UAE Gratuity Calculator
Is gratuity taxable in UAE?
No. The UAE has no personal income tax, and gratuity payments are not subject to any deduction or tax. The full amount calculated under the formula is the full amount you receive. This applies to UAE nationals and expatriates equally.
What happens to my gratuity if my company goes bankrupt?
Gratuity is treated as a preferred debt in UAE insolvency proceedings. This means employee gratuity claims have priority over many other creditors. In practice, recovery depends on the assets available. Filing your claim through MOHRE as soon as the company enters bankruptcy proceedings or ceases operations gives you the best chance of recovery. The UAE also has a Wage Protection System that tracks salary and benefit payment records, which can support your claim.
Does gratuity reset if I change roles within the same company?
No. Internal transfers or promotions within the same employer do not reset your gratuity entitlement. Your service is counted continuously from your original start date with that employer. Only an actual termination of employment, followed by a new contract, would reset the calculation. If you sign a new contract after a promotion, ensure it explicitly states that your original start date is preserved for gratuity purposes.
Can my employer deduct money from my gratuity?
Your employer can deduct from your final settlement any amounts you legitimately owe the company, for example, outstanding salary advances that were formally documented, or costs for company-sponsored training where you signed a refund agreement. What employers cannot legally do is deduct gratuity itself as a penalty for resignation, reduce it below the statutory formula, or apply deductions without documented evidence of the debt. If deductions are applied, request an itemized written breakdown before signing any final settlement documents.
Does the 2-year cap apply to the gratuity formula or to total service?
The cap applies to the total gratuity amount, not to the number of years counted. No matter how many years you have worked, your total gratuity cannot exceed the equivalent of 2 years of your gross (total) salary, including all allowances. For most employees, this cap only becomes relevant after 20+ years of service. At a basic salary of AED 10,000 with total compensation of AED 18,000 per month, for example, the cap would be AED 432,000 (24 months × AED 18,000). Very few employees hit this ceiling.
Calculate Your UAE Gratuity, Then Find Your Next Role
UAE gratuity under the 2022 law is significantly more employee-friendly than the old system. Full entitlement regardless of resignation, clearer protections for domestic workers, and a straightforward formula mean there is no reason to accept less than what you are owed. The key steps: confirm your basic salary, count your exact years and months of service, apply the 21/30-day formula, and check the result against the 2-year cap.
If you are at the stage of calculating your gratuity, you are likely planning a move. Use that momentum. Browse UAE jobs on DrJobPro to see what the market is offering in your field right now, and use the DrJobPro salary tool to make sure your next package reflects your experience and the current market.
Ready to take the next step? Register on DrJobPro to access verified job listings, set salary filters, and connect with employers who are actively hiring across the UAE.
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