UAE End of Service Gratuity Calculator

How is the gratuity calculated?

Article 51 of Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations gives a full-time non-national employee who has completed one year of continuous service or more a gratuity when the service ends. It is based on the last basic salary: 21 days’ pay for each of the first five years and 30 days’ pay for each year after that. Part years count pro rata, and the total may not exceed two years’ wage. The calculator goes through these steps in the same order and shows them in the breakdown table under the result.

1. Basic salary

In the UAE the gratuity is worked out on basic salary alone, unlike Saudi Arabia, where the actual wage with allowances is used. Leave out housing, transport and commissions. If your salary changed during your service, use the last basic salary you were paid.

2. Length of service

Service runs from your start date to your last working day, and that day counts. We take whole years, then whole months, then the days left over, and value a month at 1/12 of a year and a day at 1/360, the same 30-day unit as the daily wage. Days of unpaid absence are taken out because they do not count as service. The calculator then checks the one-year rule: under one year, the gratuity is zero.

3. Daily wage and gratuity

The daily wage is basic salary divided by 30. It is multiplied by 21 days for each year up to the end of the fifth year, and by 30 days for each year after that. Example with a basic salary of AED 10,000 and seven years of service:

• Daily wage: 10,000 ÷ 30, about AED 333.33.
• First five years: 10,000 ÷ 30 × 21 × 5 = AED 35,000.
• Next two years: 10,000 ÷ 30 × 30 × 2 = AED 20,000.
• Gratuity: 35,000 + 20,000 = AED 55,000.

4. The cap

The total may not exceed two years’ wage, and the calculator applies the cap to basic salary: 10,000 ÷ 30 × 720 = AED 240,000 for a basic salary of AED 10,000, or 24 monthly basic salaries. Only service of about 25 years and 6 months or more reaches it. “Special cases” explains this reading.

5. Reason for leaving

Under the current law, once the first year is complete the reason does not change the amount. Termination by the employer, the end of the contract term, resignation and dismissal without notice under Article 44 all give the full gratuity. We still ask, because each case gets its own note with the result, and because many people still hear about the resignation cut of the old law and want a clear answer.

6. Rounding

The calculator keeps exact fractions, so the daily wage stays 10,000 ÷ 30 rather than 333.33, and rounds the final amount once, to the nearest fils. That is why 3 years, 5 months and 15 days on a basic salary of AED 10,000 gives a gratuity of AED 24,208.33.

Special cases

Resigning no longer reduces the gratuity

The old labour law cut the gratuity of an employee who resigned, depending on the length of service. Federal Decree-Law No. 33 of 2021, in force since 2 February 2022, removed that reduction. Once you have completed one year, resigning gives you the same gratuity as being let go by the employer. A calculator or article that still applies one third or two thirds on resignation follows the old law. You still owe the notice period in your contract, which this calculator does not cover.

Dismissal without notice under Article 44

Article 44 lets the employer dismiss a worker without notice in specific cases of serious misconduct or breach. The dismissal ends the contract, but unlike under the old law it does not cancel the end-of-service gratuity. The employer may only deduct amounts that you are proven to owe it. The calculator therefore shows the full gratuity for this reason and adds a note explaining why.

Less than one year, and unpaid absence

No gratuity is due before one year of continuous service, whatever the reason the contract ended. Days of unpaid absence do not count as service, so they delay the first full year and reduce the gratuity after it; enter them in their field and the calculator removes them. Example with a basic salary of AED 10,000, the employer ending the contract and a last working day of 31 December 2024. Starting on 1 January 2024 completes one year and pays AED 7,000; starting on 2 January 2024 pays nothing.

The gratuity cap

The total gratuity may not exceed two years’ wage. The calculator applies the cap to basic salary, which is 720 days or 24 monthly basic salaries, the reading used by the legal sources that publish figures. You reach it after about 25 years and 6 months of service. Some read “two years’ wage” as total pay; the difference only shows after that point.

Part-time work

A part-time employee earns the gratuity in proportion to the hours actually worked compared with full-time hours (Cabinet Resolution No. 1 of 2022, Article 30). The calculator assumes full-time work, so multiply its result by that ratio for an estimate, for example half the result if you work half the hours.

The voluntary Savings Scheme

Since Cabinet Resolution No. 96 of 2023 an employer may join a savings scheme instead of paying the gratuity at the end. It pays a share of your basic salary each month into an approved investment fund, 5.83% under five years of service and 8.33% from five years. The gratuity earned before enrolment remains yours and is settled under the law. If your employer has enrolled you, use this calculator for the period before enrolment only.

UAE nationals and the financial free zones

The calculator does not apply to UAE nationals, who are covered by the pensions and social security law. Nor does it apply in the Dubai International Financial Centre, which replaced the gratuity with a compulsory savings plan called DEWS on 1 February 2020, or in Abu Dhabi Global Market, which has its own employment regulations.