UAE Gratuity Calculator 2024: How to Calculate Your End-of-Service Benefit

If you work in the UAE, your end-of-service gratuity is likely one of the most significant financial payouts you will ever receive from your employer. Yet most employees have only a vague idea of how it is calculated — or whether their employer is paying the right amount.

This guide covers everything: the legal formula, what changed under the 2022 UAE Labour Law, common mistakes employers make, and how to use our free calculator to verify your entitlement in minutes.

What Is UAE Gratuity?

Gratuity — officially called the end-of-service benefit — is a mandatory lump-sum payment under UAE Federal Law. Every private sector employee is entitled to it when employment ends, provided they have completed at least one full year of continuous service.

It is calculated on your basic salary only (not your total package) and the number of complete years worked for that employer.

Key point: Gratuity applies whether you resign, are terminated, or your fixed-term contract expires. Under the 2022 law, resignation no longer reduces your entitlement.

The Legal Formula

Under UAE Federal Decree-Law No. 33 of 2021 (effective 2 February 2022):

Step-by-Step Calculation

1. Find your basic monthly salary (from your employment contract — not total package)
2. Divide by 30 to get the daily rate
3. Multiply by 21 days × years served (for first 5 years)
4. Add 30 days × years served for any years beyond 5
5. Check the result doesn't exceed 24 months of basic salary

Worked Example

Employee: Basic salary AED 8,000/month | Service: 7 years 4 months

What Changed Under the 2022 UAE Labour Law

The new law introduced three changes that directly affect your gratuity:

1. Full Gratuity for Resignations

Under the old law, employees who resigned before completing 5 years received a reduced gratuity — as little as one-third of the full amount. This rule no longer applies to contracts issued or renewed after 2 February 2022. If you resign, you receive the same full entitlement as a terminated employee.

2. No More Unlimited Contracts

All new employment contracts must be fixed-term (maximum 3 years, renewable). This does not affect the gratuity formula — the calculation remains identical.

3. Probation Counts Toward Service

Time spent on probation (up to 6 months) now counts toward your total service period, provided employment continues after probation ends.

What Is Included in "Basic Salary"?

This is the most common source of disputes. The following are excluded from gratuity calculations:

In many UAE packages, basic salary is only 40–60% of total monthly salary. Always check your employment contract to confirm your basic salary figure.

Gratuity Across Gulf Countries Compared

When Does Gratuity Not Apply?

An employee forfeits gratuity only in specific circumstances under Article 44 of the Labour Law:

• Dismissed for serious misconduct (assault, intoxication on duty, revealing confidential information, causing major financial loss)
• Abandoning work without notice for more than 7 consecutive days (or 20 non-consecutive days in one year)

In all other scenarios — redundancy, company closure, contract expiry — gratuity is payable in full.

Common Employer Mistakes to Watch For

When Must Gratuity Be Paid?

UAE law requires employers to pay end-of-service gratuity within 14 days of the employment termination date. Delays beyond this can result in fines for the employer.

If your employer delays or refuses payment:

1. File a complaint via the MOHRE app or website (mohre.gov.ae)
2. Call the Ministry helpline on 800 60
3. The Ministry will mediate within 2 weeks before referring to the labour court

How to Verify Your Calculation

Use our free UAE Gratuity Calculator — enter your basic salary, country, and years of service. The calculator applies the correct legal formula and shows your full entitlement instantly. If the amount your employer offers differs significantly, request a written breakdown from HR before accepting any settlement.