UAE gratuity calculator
Work out end-of-service gratuity under the UAE Labour Law (Federal Decree-Law No. 33 of 2021) in seconds. Free, private, no sign-up.
Estimated gratuity
Less than one year of service: no gratuity is due yet.
Capped at two years' basic wage.
- Service counted
- –
- Daily basic wage
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- First 5 years (21 days a year)
- –
- After 5 years (30 days a year)
- –
- Maximum (24 months' basic)
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An estimate for full-time employees on the private-sector Labour Law. Deductions the employer is owed, free zone rules and alternative savings schemes can change the final amount.
Calculate gratuity for every employee in LedgerlineLedgerline ERP works out gratuity, leave encashment and final settlements for your whole team automatically.
How UAE gratuity is calculated
The UAE Labour Law (Federal Decree-Law No. 33 of 2021) gives full-time private-sector employees an end-of-service benefit once they complete at least one year of continuous service. It is calculated on the last basic wage:
- 21 days of basic wage for each of the first five years of service
- 30 days of basic wage for each additional year
- Parts of a year are paid in proportion to the time worked
- The total cannot be more than two years' basic wage
- Days of unpaid absence are not counted as service
Example
An employee with a basic salary of AED 6,000 works for 7 years. Using the 365-day method, the daily wage is AED 6,000 × 12 ÷ 365 = AED 197.26. Gratuity is (5 × 21 + 2 × 30) = 165 days × AED 197.26 = AED 32,547.95.
What is not included
Housing, transport, phone and other allowances are not part of the basic wage, so they are not used for gratuity. Commission and overtime are also excluded unless they are part of the basic wage in the contract.
Want the full picture? Read our complete guide to gratuity in the UAE.
Gratuity questions
How is end-of-service gratuity calculated in the UAE?
Under Federal Decree-Law No. 33 of 2021, a full-time employee with at least one year of continuous service gets 21 days of basic wage for each of the first five years and 30 days of basic wage for each year after that. Parts of a year are paid in proportion, and the total cannot be more than two years' basic wage.
Is gratuity based on basic salary or total salary?
Gratuity is based on the last basic wage only. Allowances such as housing, transport and other benefits are not included.
Do I get gratuity if I resign?
Yes. Under the current UAE Labour Law, an employee who completes at least one year of continuous service is entitled to gratuity whether they resign or the employer ends the contract. The old reductions for resigning under unlimited contracts no longer apply.
Do I get gratuity for less than one year of service?
No. Gratuity is only due once the employee has completed at least one year of continuous service.
Are unpaid leave days counted?
No. Days of unpaid absence are not counted in the period of service, so enter them in the calculator to reduce the service period.
Should the daily wage use 365 or 30 days?
Employers use both methods in practice. The 365-day method divides the annual basic salary by 365; the 30-day method divides the monthly basic by 30. Choose the one your company uses. Ledgerline uses the 365-day method by default.
Pay final settlements without spreadsheets
Ledgerline ERP calculates gratuity, leave encashment, notice pay and WPS payroll for your whole team.