Gratuity Calculator UAE 2026: How to Calculate End-of-Service Benefits
Work out your end-of-service gratuity in minutes. This guide uses the current federal rules under Federal Decree-Law No. 33 of 2021, as amended, with a ready-reckoner table, worked AED examples and separate notes for DIFC and ADGM.
For expatriate employees covered by the UAE federal private-sector Labour Law, gratuity = 21 days' basic wage for each of the first 5 years + 30 days' basic wage for each year after that. Daily wage = monthly basic wage ÷ 30. You need at least 1 year of continuous service. Partial years are paid pro rata, unpaid absence is excluded, and the total is capped at two years' wage. Since February 2022, resigning no longer reduces your gratuity.
DIFC, ADGM, domestic workers, UAE nationals and government employees follow different rules. If you work in DIFC or ADGM, do not use the federal formula below. See DIFC and ADGM.
- What changed: former law vs current law
- Who is eligible, and which regime applies
- The federal gratuity formula, step by step
- Gratuity calculator table by years of service
- Worked examples in AED
- Resignation, termination and Article 44 dismissal
- Partial years, unpaid leave, part-time and the cap
- The federal Savings Scheme
- DIFC: DEWS
- ADGM: separate gratuity rules
- When it must be paid and how to claim
- Common mistakes
- FAQs
What changed: former UAE gratuity rules vs current law
Many calculators and older articles still use the 1980 labour law. That law split contracts into "limited" and "unlimited" and cut gratuity for employees who resigned early. Both rules are gone.
| Rule | Former Federal Law No. 8 of 1980 | Federal Decree-Law No. 33 of 2021 (from 2 February 2022) |
|---|---|---|
| Contract types | Limited and unlimited | Fixed-term contracts only; unlimited contracts had to be converted |
| Resignation before 5 years | Reduced to 1/3 or 2/3 of gratuity | No reduction. Full gratuity after 1 year |
| Formula | 21 days (first 5 years), 30 days after | Same: 21 days, then 30 days |
| Dismissal for gross misconduct | Specific forfeiture rules | No automatic forfeiture; lawful deductions only |
| Part-time workers | Not addressed | Pro rata, based on contracted hours |
| Time limit to file a claim | 1 year | 2 years from end of employment (2024 amendment) |
The time limit for federal employment claims is now 2 years from termination, not 1 year. Many older guides still show the old deadline.
Who is eligible for gratuity in the UAE?
Under the federal Labour Law, you qualify if you are:
- A foreign (expatriate) employee in the private sector, on the mainland or in most non-financial free zones.
- In at least 1 year of continuous service with the same employer.
- Full-time, part-time or on another recognised work pattern (part-time is pro rata).
Who ends the contract does not affect eligibility.
| Where you work | Applicable regime |
|---|---|
| Mainland and most non-financial free zones | Federal Labour Law, Article 51 (this guide) |
| DIFC | DEWS or another qualifying scheme |
| ADGM | ADGM Employment Regulations 2024, with separate gratuity rules |
| UAE nationals | Pension contributions (GPSSA or the relevant emirate fund) |
| Domestic workers | Separate domestic workers law |
| Federal and local government | Their own HR and pension laws |
Federal UAE gratuity formula, step by step
Use the basic wage in your employment records. Do not add housing, transport, bonuses or other allowances.
Daily wage = monthly basic wage ÷ 30.
From start date to last working day, minus any unpaid absence days.
Daily wage × 21 × years (up to 5).
Daily wage × 30 × years beyond 5.
Add pro rata for any part-year. The total may not exceed two years' wage.
Gratuity = (Basic ÷ 30 × 21 × years up to 5) + (Basic ÷ 30 × 30 × years beyond 5), capped at two years' wage.
Legal basis: Article 51 of Federal Decree-Law No. 33 of 2021, as amended.
UAE gratuity calculator table by years of service
Use this as a quick calculator. Multiply your monthly basic wage by the "months of basic" figure.
| Years of service | Days of basic wage | Months of basic | On AED 10,000 basic |
|---|---|---|---|
| Under 1 | 0 | 0 | AED 0 |
| 1 | 21 | 0.70 | AED 7,000 |
| 2 | 42 | 1.40 | AED 14,000 |
| 3 | 63 | 2.10 | AED 21,000 |
| 4 | 84 | 2.80 | AED 28,000 |
| 5 | 105 | 3.50 | AED 35,000 |
| 6 | 135 | 4.50 | AED 45,000 |
| 7 | 165 | 5.50 | AED 55,000 |
| 8 | 195 | 6.50 | AED 65,000 |
| 9 | 225 | 7.50 | AED 75,000 |
| 10 | 255 | 8.50 | AED 85,000 |
| 11 | 285 | 9.50 | AED 95,000 |
| 12 | 315 | 10.50 | AED 105,000 |
| 13 | 345 | 11.50 | AED 115,000 |
| 14 | 375 | 12.50 | AED 125,000 |
| 15 | 405 | 13.50 | AED 135,000 |
| 20 | 555 | 18.50 | AED 185,000 |
| 25 | 705 | 23.50 | AED 235,000 |
| 25.5 and over | 720 (cap) | 24.00 maximum | AED 240,000 maximum* |
*Cap shown on basic wage, the conservative reading of "two years' wage". Legal basis: Article 51 of Federal Decree-Law No. 33 of 2021. Calculations by Eduyush.
Each of your first 5 years earns 0.7 months of basic wage. Each year after that earns 1 full month.
UAE gratuity worked examples in AED
333.33 × 21 × 3 = AED 21,000
The former law would have paid only one-third (AED 7,000) on resignation. That cut no longer applies.
500 × 21 × 5 = AED 52,500
The 30-day rate starts only from year 6.
Years 1–5: 400 × 21 × 5 = AED 42,000
Years 6–7: 400 × 30 × 2 = AED 24,000
Total = AED 66,000
666.67 × 21 × 4 = AED 56,000
Completing the contract term does not switch you to the 30-day rate. That rate depends only on service beyond 5 years.
Service = 3.667 years
300 × 21 × 3.667 = AED 23,100
The 8 months are paid pro rata because the first full year is complete.
Years 1–5: 500 × 21 × 5 = AED 52,500
Year 6: 500 × 30 × 1 = AED 15,000
Total = AED 67,500
Using the AED 23,000 total package instead of the AED 15,000 basic wage would overstate this example by AED 36,000.
Gratuity on resignation, termination and Article 44 dismissal
| How employment ends | Federal gratuity position |
|---|---|
| Resignation after 1+ year | Full gratuity, no reduction |
| Termination by employer | Full gratuity |
| Fixed-term contract expires | Full gratuity |
| Dismissal without notice (Article 44) | No automatic forfeiture; lawful deductions may apply |
| Leaving before 1 year | No gratuity |
| Death of employee | Paid to the legal heirs |
Dismissal under Article 44 does not automatically forfeit end-of-service gratuity under the current federal Labour Law. The employer may still deduct amounts you owe, but only as the law or a court judgment allows.
Resigning without serving your notice period can make you liable for notice pay. Your employer may set that off against your final settlement, so serve notice where you can.
Partial years, unpaid leave, part-time work and the two-year cap
- Partial years: paid pro rata once you pass 1 full year.
- Unpaid leave: unpaid absence days do not count as service.
- Probation: counts as service if you continue after probation.
- Part-time and job-sharing: full-time gratuity × (contracted annual hours ÷ full-time annual hours).
- Cap: total gratuity cannot exceed two years' wage. On basic wage, this only matters after about 25½ years.
- Salary changes: the calculation uses your last basic wage, not an average.
Legal basis: Article 51 of Federal Decree-Law No. 33 of 2021; part-time method under the Executive Regulations (Cabinet Resolution No. 1 of 2022).
The federal Savings Scheme
Under the Voluntary Alternative End of Service Benefits Scheme, employers can fund end-of-service benefits monthly instead of paying a lump sum at exit.
- Who joins: employers who choose to opt in. It is voluntary.
- Contributions: 5.83% of monthly basic wage for the first 5 years of service, 8.33% after that, paid into an approved investment fund.
- After enrolment: the employer stops accruing traditional Article 51 gratuity for the post-enrolment period and pays the fund contributions instead.
- Before enrolment: gratuity earned before enrolment is handled separately under the scheme's rules. Ask HR for a written breakdown.
Legal basis: Cabinet Resolution No. 96 of 2023; Ministerial Resolution No. 668 of 2023.
Does the UAE gratuity formula work for DIFC?
No. Most DIFC employees are covered by DEWS (DIFC Employee Workplace Savings) or another qualifying scheme. Your employer pays monthly contributions into a funded savings plan instead of building up an Article 51 lump sum. Check your DEWS or scheme statement rather than using the table above. Some employees may be exempt, so confirm your status with HR.
Does the UAE gratuity formula work for ADGM?
Not directly. ADGM is outside the federal Labour Law. Since 1 April 2025, it applies its own ADGM Employment Regulations 2024. These still provide an end-of-service gratuity, but with key differences:
- Gratuity is payable regardless of the reason employment ends.
- The two-year pay cap was removed.
- ADGM uses its own calculation method, so the federal ÷30 table may not match.
- Employers may offer a pension or savings scheme as an alternative to gratuity.
ADGM employment disputes go to the ADGM Courts, not MOHRE.
When must gratuity be paid, and how do you claim it?
Wages, leave pay and gratuity must be settled within 14 days of the contract ending (Article 53).
Share your own calculation and ask for an itemised breakdown.
Use the MOHRE app, website or call centre. MOHRE first tries an amicable settlement.
For claims up to AED 50,000, MOHRE issues a binding, enforceable decision. Larger unresolved claims are referred to the labour court.
Either party can challenge it before the Court of Appeal within 15 working days of notification.
Claims are not heard after 2 years from the end of employment.
Legal basis: Articles 53 and 54 of Federal Decree-Law No. 33 of 2021, as amended by Federal Decree-Law No. 20 of 2023 and No. 9 of 2024.
Common UAE gratuity calculation mistakes
-
Using the wrong jurisdiction
DIFC and ADGM employees should not use the federal formula.
-
Using limited vs unlimited rules
That split ended in 2022. One federal formula now applies.
-
Cutting gratuity on resignation
The one-third and two-thirds reductions were abolished.
-
Using total salary
Only the basic wage counts. Allowances are excluded.
-
Applying 30 days too early
The 30-day rate applies only from year 6.
-
Ignoring the part-year
Months after your last full year are paid pro rata.
UAE gratuity FAQs
How is gratuity calculated in the UAE in 2026?
Do I lose gratuity if I resign in the UAE?
Is gratuity calculated on basic or gross salary?
What is the gratuity for 5 years in the UAE?
Is there gratuity for less than 1 year of service?
Can my employer withhold gratuity for misconduct?
Does this calculator work for DIFC or ADGM?
How long does my employer have to pay gratuity?
Is UAE gratuity taxable?
Related UAE employment guides
Many UAE professionals use their gratuity to fund a global finance qualification. See the full cost of ACCA from the UAE before you decide.
Check ACCA costs for UAEWritten by the Eduyush team. Legislation checked against MOHRE, u.ae, DIFC and ADGM official sources on 4 October 2026: Federal Decree-Law No. 33 of 2021 (Articles 51–54) as amended by Federal Decree-Law No. 20 of 2023 and No. 9 of 2024, Cabinet Resolution No. 1 of 2022, Cabinet Resolution No. 96 of 2023, Ministerial Resolution No. 668 of 2023, and the ADGM Employment Regulations 2024. This is general guidance, not legal advice. For disputes, contact MOHRE or a UAE employment lawyer.
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Gratuity in UAE Questions? Answers.
How is the gratuity affected if I switch from a limited to an unlimited contract with the same employer?
Switching contract types doesn't reset the gratuity calculation; it continues to accumulate based on your total service period. However, the calculation method may differ between contract types if the switch occurs
How is gratuity calculated if I have a mixed salary component (basic + allowances)?
Gratuity is calculated based on the basic salary excluding allowances. However, some exceptions apply, so it’s essential to consult the specific terms of your employment contract.
Is there a cap on the maximum gratuity an employee can receive?
As per UAE labor law, the end-of-service gratuity cannot exceed the wage of two years of service, regardless of the length of service.
What happens to my gratuity calculation if I'm transferred to a different company under the same employer or group company?
Transfers within group companies typically do not affect the continuous calculation of gratuity, provided there's no break in service. However, specific terms might vary based on internal company policies.
How does the gratuity calculation work for employees in senior managerial positions or those with shareholding interests?
For managerial positions or shareholders, gratuity calculations follow the same basic salary principle unless specified differently in the employment contract or company policies.
Are there any circumstances under which an employee can lose their entitlement to gratuity pay?
Aside from dismissal due to gross misconduct, employees might lose gratuity entitlement if they resign without serving the notice period or fail to comply with other contractual obligations leading to financial loss for the employer.
Can employees in high-risk jobs expect any adjustments in their gratuity calculations?
While UAE labor laws do not explicitly adjust gratuity calculations for high-risk jobs, some companies may offer enhanced terms as part of their contract or through insurance schemes that provide additional benefits upon service termination.
How does the gratuity calculation differ for employees who are terminated for redundancy?
Employees terminated due to redundancy are entitled to full gratuity based on their period of service, as redundancy is considered a termination without cause under UAE labor laws.
How is gratuity calculated for employees who have taken sabbatical leave during their tenure?
Sabbatical leave is generally unpaid, and periods of unpaid leave are excluded from the service period for gratuity calculations. However, the specifics can depend on company policy and the terms agreed upon before the sabbatical.
Are there specific provisions for calculating gratuity for commission-based employees?
For employees earning commission, the UAE labor laws consider the basic salary for gratuity calculations. Commission or other variable components are usually excluded unless otherwise specified in the employment contract.
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