Gratuity Calculator UAE 2026: How to Calculate Your End-of-Service Benefits

Wondering how much gratuity you should receive when leaving your UAE job? Start with your basic salary, employment dates and any unpaid absence.

For eligible full-time expatriate employees under the standard federal private-sector rules, gratuity is based on 21 days of basic wage for each of the first five years of service, followed by 30 days for each additional year. Employees must complete at least one year of continuous service to qualify.

This UAE gratuity calculator guide explains the formula, provides worked examples and shows what to check before accepting your final settlement.

Want to calculate an estimate now? Use the Dubai Development Authority’s official gratuity calculator, then read the explanations below to understand the result. DDA describes its calculation as guidance rather than a binding determination of entitlement.

What Information Do You Need for a UAE Gratuity Calculation?

Prepare these details before using a calculator or checking an employer’s estimate:

Information	What to use
Monthly basic salary	Your last applicable contractual basic salary
Employment start date	The recorded commencement date
Employment end date	The recorded end of employment
Unpaid absence	Days excluded from qualifying service
Employment arrangement	Full-time, part-time or another work pattern
Applicable framework	Federal employment rules or a separate jurisdiction
Savings-scheme status	Whether an alternative end-of-service scheme covers any period

Use employment records rather than approximate dates. A small difference in the service period can change the final amount.

Who Qualifies for Gratuity in the UAE?

This guide’s standard formula applies to eligible full-time expatriate employees covered by the federal private-sector employment framework.

After completing one year of continuous service, employees also receive a proportionate entitlement for qualifying fractions of a year.

However, the same calculation should not automatically be applied to everyone.

Employment category	Appropriate approach
Eligible full-time expatriate employee under the traditional federal system	Use the standard formula, subject to applicable adjustments
Part-time or another work pattern	Check the relevant proportional calculation
Employee enrolled in an alternative savings scheme	Review scheme contributions and earlier accrued entitlement
Employee working under DIFC or ADGM rules	Check the independent employment framework
UAE national	Check applicable pension and social-security provisions
Government employee or domestic worker	Consult the rules governing that employment category

The UAE Government provides separate guidance for alternative work patterns and savings schemes. DIFC and ADGM have independent employment frameworks.

How to Calculate Gratuity in UAE

For the examples in this guide, we use the common monthly-salary calculation convention:

Daily basic wage = Monthly basic salary ÷ 30

Then apply the relevant service bands.

For One to Five Years of Qualifying Service

Estimated gratuity = Monthly basic salary ÷ 30 × 21 × qualifying years

For More Than Five Years

Calculate the first five years and the remaining service separately:

First five years = Monthly basic salary ÷ 30 × 21 × 5

Additional years = Monthly basic salary ÷ 30 × 30 × additional qualifying years

Add both amounts to obtain the estimate before applicable adjustments and the statutory cap.

The underlying entitlement is 21 days per year for the first five years and 30 days per year thereafter.

Calculation-method note: Published authority examples do not always use identical day-count conventions. For example, DMCC’s guidance annualises monthly salary over 365 days and explains that its examples are an interpretation of the law. Check the method relevant to your employment when reconciling different estimates.

Is Gratuity Calculated on Basic Salary or Total Salary?

The standard calculation uses the last basic wage. Housing, transport and other allowances are generally excluded from that calculation base. The UAE Government’s end-of-service benefits guidance explains this distinction.

Consider this salary package:

Salary component	Monthly amount
Basic salary	AED 4,000
Housing allowance	AED 1,500
Transport allowance	AED 500
Total monthly package	AED 6,000

For the standard examples below, the calculation would use AED 4,000.

Check your contract and subsequent salary amendments. The amount deposited into your account may include allowances, reimbursements or variable payments.

UAE Gratuity Calculation Examples

The following examples assume complete qualifying years, no unpaid absence, no alternative savings scheme and no deductions. They use monthly basic salary divided by 30.

Example 1: AED 3,000 Basic Salary After Two Years

AED 3,000 ÷ 30 × 21 × 2 = AED 4,200

Calculation step	Result
Daily basic wage	AED 100
Gratuity days: 21 × 2	42 days
Estimated gratuity	AED 4,200

Example 2: AED 5,000 Basic Salary After Five Years

AED 5,000 ÷ 30 × 21 × 5 = AED 17,500

The estimated gratuity is AED 17,500.

Keep the full decimal value during intermediate calculations. Round the final amount rather than rounding the daily wage first.

Example 3: AED 6,000 Basic Salary After Seven Years

Service period	Calculation	Amount
First five years	AED 6,000 ÷ 30 × 21 × 5	AED 21,000
Following two years	AED 6,000 ÷ 30 × 30 × 2	AED 12,000
Estimated gratuity	Combined amount	AED 33,000

The 30-day rate applies only to service after the first five years.

Example 4: AED 4,000 Basic Salary After Two Years and Six Months

For a simplified estimate using exactly 2.5 qualifying years:

AED 4,000 ÷ 30 × 21 × 2.5 = AED 7,000

Actual date-based calculations should use the recorded service period and disclose the day-count method.

Gratuity Estimates by Basic Salary and Service Period

Use this table as a quick reference under the same assumptions.

Monthly basic salary	1 year	2 years	3 years	5 years	7 years
AED 3,000	AED 2,100	AED 4,200	AED 6,300	AED 10,500	AED 16,500
AED 4,000	AED 2,800	AED 5,600	AED 8,400	AED 14,000	AED 22,000
AED 5,000	AED 3,500	AED 7,000	AED 10,500	AED 17,500	AED 27,500
AED 6,000	AED 4,200	AED 8,400	AED 12,600	AED 21,000	AED 33,000
AED 8,000	AED 5,600	AED 11,200	AED 16,800	AED 28,000	AED 44,000

These figures estimate gratuity only. Your final settlement may include other amounts.

Do Partial Years Count Towards Gratuity?

Yes. Once the one-year eligibility requirement is satisfied, qualifying parts of a year count proportionately.

Avoid confusing decimal years with years and months:

• 1.5 years means one year and six months.
• 1.25 years means one year and three months.
• 1.3 years does not mean one year and three months.

A date-based calculator reduces this input mistake, provided its date-counting assumptions are explained.

How Does Unpaid Leave Affect Gratuity?

Unpaid absence is excluded when calculating the qualifying service period. It does not automatically reduce the daily salary used in the formula.

Ask payroll to show:

1. Total employment period.
2. Unpaid absence excluded.
3. Remaining qualifying service.
4. Salary and calculation method used.

If your estimate differs from the employer’s figure, compare these inputs before assuming the formula is wrong.

Do You Receive Gratuity If You Resign?

Under the current federal framework, resignation does not automatically trigger the old one-third or two-thirds gratuity reductions.

DMCC’s guidance on Federal Decree-Law No. 33 of 2021 explains that the basic entitlement formula applies whether the employee resigns or the employer terminates employment. Eligibility and any lawful adjustments still need to be considered.

When using a calculator, check the legal framework behind it. A tool that applies historic resignation reductions without explaining why may not match your circumstances.

Is There a Maximum Gratuity Amount?

The federal framework includes a cap of two years’ wage. DMCC’s published guidance describes this as two years’ total pay.

The salary base used to calculate yearly accrual and the wording of the overall cap are separate issues. For long-service cases approaching the cap, confirm its application with the responsible authority or a qualified employment adviser.

A calculator should state how it applies the cap rather than silently substituting an unexplained limit.

When Must Gratuity Be Paid?

The UAE Government states that employers must pay outstanding wages, gratuity and other entitlements within 14 days of the employment contract’s termination.

Request an itemised statement and a payment date. Keep copies of your contract, salary records, employment-end correspondence and settlement documents.

If the matter remains unresolved, consult the official UAE workers’ rights guidance and contact the Ministry of Human Resources and Emiratisation (MoHRE) or the authority responsible for your employment.

Gratuity vs Final Settlement: What Is the Difference?

Gratuity is one part of the amount that may be payable when employment ends. It is also separate from ILOE unemployment insurance, which has its own subscription and claim rules.

Depending on the circumstances, other items may include unpaid salary, unused leave, notice-related payments and contractual benefits. Official termination guidance distinguishes gratuity from notice dues and other unpaid entitlements.

Settlement item	What to check
Gratuity	Basic salary, service period, calculation method and adjustments
Unpaid salary	Dates worked and amounts already received
Leave balance	Recorded balance and applicable calculation
Notice-related payment	Contractual notice requirements and circumstances
Other benefits or deductions	Contractual or legal basis and supporting records

A gratuity calculator should not label its result “your final settlement” unless it separately calculates all relevant components.

What If You Are Enrolled in an Alternative Savings Scheme?

An approved alternative end-of-service scheme can change how benefits accrue for the period covered by enrolment.

Instead of relying solely on a traditional lump-sum gratuity liability, participating employers make contributions into approved investment funds. Ask for your scheme statement and an explanation of any entitlement preserved from service before enrolment.

Do not apply the traditional formula to the whole employment period without checking whether part of that period is covered by a scheme.

Why Do Two UAE Gratuity Calculators Give Different Answers?

Compare the assumptions behind each result.

Common causes include:

• Different basic salary inputs.
• Different start or end dates.
• Unpaid absence included in one calculation but excluded in another.
• Different day-count conventions.
• Rounded service years instead of exact dates.
• Historical resignation rules.
• A different employment framework.
• Savings-scheme coverage or cap treatment.

A useful calculator explains its inputs, method and limitations. A precise-looking number is not enough on its own.

Using a 2023, 2024 or 2025 UAE Gratuity Calculator

If you searched for “UAE gratuity calculator 2024,” “gratuity calculator UAE 2023” or a 2025 version, first establish whether you need a historical settlement calculation or an estimate for employment ending now.

For a historical settlement, use the salary, service dates, employment framework and scheme arrangements relevant to that period. Do not replace the historical basic salary with today’s salary or assume the year in a calculator’s title establishes legal accuracy.

For a current estimate, choose a tool with a clear methodology and recently checked official references.

What Employers Should Include in Their Staffing Budget

For business owners, gratuity is an employment cost to plan for throughout the employee’s service.

Maintain accurate records of salary changes, leave and employment dates. Reconcile savings-scheme contributions where applicable, and review the expected liability when planning staffing costs.

If you are establishing a company, compare business setup options in Dubai with your hiring requirements in mind. Ask providers about employee permits, payroll and bookkeeping support and services excluded from the formation package.

The BusinessSetup.ae FAQs provide further information about comparing setup options and provider services.

Planning Your Next Step in the UAE?

If you are considering starting a business after employment, prepare a separate business budget covering setup costs, licence renewals and operating costs.

BusinessSetup.ae helps you compare UAE business setup packages and connect with providers. Review package inclusions and exclusions before requesting a quotation.

Compare UAE business setup options and request a quote. The relevant provider will contact you to discuss your requirements.

Official Sources and Calculation References

• UAE Government: End-of-service benefits for private-sector workers
• UAE Legislation: Federal Decree-Law No. 33 of 2021 and amendments
• Dubai Development Authority: Gratuity calculator
• DMCC: End-of-service benefit calculation guidance
• UAE Government: Protection of workers’ rights

Updated: 14 October 2026. This guide provides general information and illustrative estimates. Your employment framework, contract, qualifying service and applicable scheme determine the final entitlement.