UAE Gratuity Calculator — Your End-of-Service Amount in Seconds

What is UAE Gratuity? — End of Service Benefits Explained

UAE end-of-service gratuity is a statutory lump-sum benefit paid to eligible private-sector employees when employment ends. It is designed to protect employees at resignation, termination, contract completion, or mutual separation after at least one full year of continuous service.

The core legal basis is UAE Federal Decree-Law No. 33 of 2021. For most mainland and non-DIFC private-sector employees, gratuity is calculated from the employee's basic salary, not the full compensation package. Housing, transport, phone, food, commission, overtime, and discretionary bonuses are generally excluded unless the contract or a binding award says otherwise.

The standard formula awards 21 days of basic salary for each year in the first five years of service and 30 days of basic salary for each year after that. The total statutory gratuity is capped at two years of basic salary.

UAE Gratuity Calculation Formula — 21 Days and 30 Days Explained

Daily basic salary = Monthly basic salary ÷ 30
First 5 years = Daily basic salary × 21 days × years of service
After 5 years = Daily basic salary × 30 days × years beyond 5
Maximum gratuity = 24 months of basic salary

Use the basic salary shown in your employment contract. If your salary changed during employment, the final basic salary is commonly used for the gratuity estimate, but disputed or unusual compensation structures should be checked with MOHRE or legal counsel.

Unpaid leave days are normally excluded from continuous service for the gratuity calculation. This calculator lets you subtract unpaid leave so the estimate reflects eligible service days more accurately.

Resignation vs. Termination After the 2022 Reform — Same Formula for Fixed-Term Contracts

One of the most important UAE gratuity updates is the removal of the old resignation penalty for new fixed-term contracts. Under the post-2022 UAE labour-law framework, employees on limited or fixed-term contracts use the same gratuity formula whether they resign or are terminated, provided they completed at least one full year of continuous service.

Legacy warning: Some older unlimited contracts may still have transitional conditions or historical payroll treatment. If your contract began before the 2022 reforms and was not clearly converted to a fixed-term contract, confirm the applicable position with HR, MOHRE, or a qualified UAE labour-law adviser before relying on any estimate.

Alternative End-of-Service Savings Scheme — Cabinet Resolution No. 96 of 2023

In addition to the traditional gratuity model, the UAE introduced a voluntary alternative end-of-service benefits system through Cabinet Resolution No. 96 of 2023. This alternative savings and investment framework is supervised by MOHRE and the Securities and Commodities Authority (SCA). It allows participating employers to move away from the classic end-of-service accrual method and enroll eligible workers in regulated investment funds.

Under the mechanism, the employer makes monthly contributions into approved investment funds instead of only carrying a gratuity liability on its books. The employee's end-of-service benefit then depends on the accumulated contributions and the performance of the selected fund, subject to the rules of the scheme. This creates a clearer funding path for employers and can give employees more transparent visibility over their long-term benefit balance.

Progressive UAE employers are increasingly reviewing this alternative end-of-service savings scheme in 2026 because it can improve funding discipline, employee transparency, and portability. It is not automatically used by every company. Your employer must be enrolled in the approved scheme, and your employment documents or HR portal should state whether your benefit is handled through the traditional gratuity formula or the alternative investment scheme.

To check your status, ask HR whether your company participates in the MOHRE-supervised alternative end-of-service benefits scheme, request the name of the approved fund, and confirm whether monthly contributions are being made at 5.83% or 8.33% of your basic salary. If your employer has not transitioned, the standard gratuity calculation remains the practical estimate for most employees.

Worked Examples — What Will You Actually Get?

What Counts as Basic Salary for UAE Gratuity?

If your employer uses total salary instead of basic salary, or excludes amounts that are actually part of your contractual basic wage, ask for a written final-settlement breakdown before signing any clearance document.

Final Settlement UAE — More Than Just Gratuity

A UAE final settlement normally includes more than the end-of-service gratuity amount. Check each line before signing:

• Unpaid salary for days already worked.
• End-of-service gratuity using the 21-day and 30-day formula.
• Unused annual leave encashment where applicable.
• Notice-period pay if owed by either party.
• Approved bonuses, commissions, or reimbursements if contractually due.
• Lawful documented deductions, such as salary advances, loans, or unreturned company property.

Under Article 53, the employer must pay all end-of-service entitlements within 14 days from the contract termination date.

Can UAE Gratuity Be Withheld?

Under the current UAE Labour Law framework, an eligible employee's end-of-service gratuity should not be forfeited simply because of resignation, termination, workplace allegations, or leaving without notice. Deductions should be limited to legally documented amounts owed by the employee, such as salary advances, loans, or unreturned company assets.

If an employer reduces or refuses gratuity, ask for a written explanation and a line-by-line final-settlement statement. Do not rely only on verbal explanations. If the deduction is not documented or appears inconsistent with the law, raise the issue through MOHRE.

Employees with less than one full year of continuous service are generally not eligible for statutory gratuity. That is an eligibility rule, not a forfeiture penalty.

Free Zones — DIFC, ADGM, DEWS and Mainland UAE Rules

Many UAE free zones follow the mainland gratuity approach, but DIFC and ADGM have separate employment frameworks and savings-plan structures. DIFC employers commonly use the DIFC Employee Workplace Savings plan, known as DEWS, instead of the standard mainland gratuity formula.

If you work in a free zone, check your employment contract, free-zone authority guidance, and HR policy before relying on a mainland gratuity estimate. This calculator is best suited for standard UAE private-sector gratuity estimates under Federal Decree-Law No. 33 of 2021.

English-Arabic UAE Gratuity Glossary

These bilingual terms help employees, HR teams, and Arabic-speaking users understand common UAE labour-law and end-of-service benefit phrases.

Cases This Calculator May Not Cover

• Domestic-worker arrangements or categories governed by separate rules.
• DIFC, ADGM, DEWS, or alternative savings-plan employees.
• Part-time, flexible-work, or unusual working-pattern contracts requiring proportional calculations.
• Disputes over whether allowances were disguised as basic salary.
• Cases involving court judgments, settlement agreements, or documented employer counterclaims.

Why Use This Free UAE Gratuity Calculator?

• Uses the 21-day and 30-day UAE gratuity formula for standard private-sector estimates.
• Reflects the 2022 reform parity for resignation and termination on fixed-term contracts.
• Accounts for unpaid leave days and the two-year basic-salary cap.
• Explains the alternative end-of-service savings scheme and 2026 employer transition questions.
• Provides English-Arabic terminology for UAE gratuity, final settlement, and labour disputes.
• Runs in your browser without requiring login, email, or account creation.