FREE TOOL
UAE GRATUITY CALCULATOR
Work out your end-of-service benefit instantly. Calculation per the UAE Labour Law (Federal Decree-Law 33/2021): 21 days basic salary per year for the first 5 years, 30 days per year after, capped at 2 years’ wages.
Not legal advice.This calculator is provided as a guide only and is not a substitute for qualified UAE labour-law advice. Figures may differ from your employer’s calculation due to contract specifics, unpaid leave, or other factors. Always verify with your contract and HR department.
Most UAE contracts use 60%. Check your contract.
UNDERSTANDING UAE GRATUITY
End-of-service gratuity is a statutory benefit paid to private sector employees in the UAE on termination of employment. It is governed by Federal Decree-Law No. 33 of 2021, which came into force in February 2022 and replaced the previous Labour Law.
The two-tier formula
For each of the first 5 years of continuous service, you accrue 21 days of basic salary per year. From the start of year 6 onward, the rate increases to 30 days of basic salary per year. The years before the 5-year mark stay at the lower rate — the 30-day rate only applies to time accrued after.
Daily basic is calculated as monthly basic divided by 30, which is the standard convention used by the Dubai Development Authority (DDA) and most UAE legal references.
The cap
Total gratuity is capped at 2 years’ basic salary, i.e. 24 months of basic. This ceiling is reached at roughly 25 years of service. For most employees this cap is theoretical rather than practical.
Basic vs. total salary
Gratuity is calculated on basic salary only. Allowances such as housing, transport, communication, and other fringe benefits are excluded. Read your employment contract carefully — in most UAE companies, basic is around 50–70% of total compensation, so the gratuity number is often smaller than employees expect.
Does gratuity differ between Dubai, Abu Dhabi, and the other emirates?
For mainland employment, no — UAE end-of-service gratuity is set by federal law and applies identically across all seven emirates: Dubai, Abu Dhabi, Sharjah, Ajman, Fujairah, Ras Al Khaimah, and Umm Al Quwain. The same 21-day / 30-day tiered formula and the same 24-month cap apply regardless of which emirate your visa or trade licence is in.
The exceptions are the two financial free zones with their own employment regimes: DIFC (Dubai International Financial Centre) operates under DIFC Employment Law and the mandatory DEWS savings scheme; ADGM (Abu Dhabi Global Market) operates under its own regulations. If your employer is registered in one of those zones, the calculation may be different — check with HR. For mainland Dubai, mainland Abu Dhabi, mainland Sharjah, and the other emirates, this calculator applies.
Resignation vs. termination
Under the new law (Decree-Law 33/2021), gratuity rules apply equally regardless of whether you resign or are terminated, as long as you have completed at least one year of continuous service. The old distinction between unlimited and limited contracts has been abolished — all UAE private sector contracts are now fixed-term.
For employers
Gratuity is an accruing liability. Best practice is to provision for it monthly: roughly 5.83% of basic salary for employees in their first 5 years (21 days ÷ 12 months ÷ 30 days), and 8.33% of basic salary for years beyond 5. Setting these aside in a dedicated account avoids cashflow surprises when an employee leaves.
FREQUENTLY ASKED QUESTIONS
How is gratuity calculated in the UAE?
Per Federal Decree-Law 33/2021, gratuity equals 21 days of basic salary for each of the first 5 years of service, then 30 days of basic salary per year for years beyond 5. Daily basic is calculated as monthly basic divided by 30. The total is capped at 2 years' basic salary (24 months × monthly basic).
Is gratuity calculated the same in Dubai, Abu Dhabi, and Sharjah?
Yes — UAE end-of-service gratuity is governed by federal law (Federal Decree-Law 33/2021), which applies identically across all 7 emirates: Dubai, Abu Dhabi, Sharjah, Ajman, Fujairah, Ras Al Khaimah, and Umm Al Quwain. The two financial free zones — DIFC in Dubai and ADGM in Abu Dhabi — operate under their own employment laws (DIFC has the DEWS scheme; ADGM has its own end-of-service provisions). If you work in mainland Dubai, mainland Abu Dhabi, or any other emirate's mainland, this calculator applies. If you work in DIFC or ADGM, check your specific employer scheme.
I'm in DIFC — does this calculator apply to me?
DIFC operates under DIFC Employment Law and the mandatory DEWS (DIFC Employee Workplace Savings) scheme. Under DEWS, your employer makes monthly contributions (typically 5.83% of basic for the first 5 years, 8.33% after) directly into a managed savings plan instead of accruing a notional gratuity. The economic value is similar but the mechanism differs. Check with your DIFC employer for your scheme details.
I'm in ADGM — does this calculator apply to me?
ADGM has its own employment regulations and may use a workplace savings scheme similar to DEWS. The federal Decree-Law 33/2021 does not directly apply inside ADGM. Check with your ADGM employer for the specific calculation that applies to you.
Is gratuity calculated on basic salary or total salary?
Only on basic salary. Allowances such as housing, transport, and other benefits do NOT count toward gratuity unless your employment contract explicitly states otherwise. Always check your contract — at Grassroots and most UAE employers, the breakdown is typically 60% basic / 40% allowances.
Do I get gratuity if I resign?
Yes. Under UAE Federal Decree-Law 33/2021 (effective February 2022), employees are entitled to full gratuity on resignation provided they have completed at least one year of continuous service. The previous distinction between resignation and termination has been removed for limited contracts.
Is there a minimum service period to receive gratuity?
Yes — you must complete at least one year of continuous service. Sub-1-year tenure is not entitled to any gratuity, regardless of the reason for leaving.
How does probation affect gratuity?
Probation counts as part of your continuous service for gratuity purposes once you complete it. If you leave during probation you are not entitled to gratuity.
What is the maximum gratuity I can receive?
The cap is 2 years' worth of basic salary — 24 monthly basic salaries. Once your accumulated gratuity reaches this amount, no further accrual happens regardless of how long you stay.
Does unpaid leave reduce my gratuity?
Strictly speaking, periods of unpaid leave should be excluded from your length of service. In practice, most UAE employers calculate gratuity on calendar service from start to end date. Confirm with your HR.
How should I store my gratuity provisions as an employer?
Set aside roughly 5.83% of each employee's basic salary per month for the first 5 years (21 days ÷ 12 months ÷ 30 days), then 8.33% for years beyond 5. This builds a reserve that matches your accruing liability.
Disclaimer
This calculator implements the formula in UAE Federal Decree-Law 33/2021 to the best of public guidance. It is provided as a convenience and should not be relied on as legal or HR advice. For binding figures, consult your employment contract and your HR department, or seek qualified UAE labour law counsel.