What Is the UAE Gratuity Calculator?
This calculator computes your end-of-service gratuity under UAE Federal Decree Law No. 33 of 2021, enforced by the Ministry of Human Resources and Emiratisation (MoHRE). It calculates the number of working days’ pay you are entitled to based on your total years of service, using your last basic salary as the rate base.
The UAE has one of the most clearly defined gratuity frameworks in the GCC. Since the 2021 law unified all contract types (previously limited and unlimited), most private-sector employees now follow a single consistent formula.
How to Use This Calculator
- Enter your monthly basic salary in AED — this is specifically the base salary in your MoHRE-registered contract, excluding housing, transport, and all other allowances.
- Enter your total years and extra months of service from your joining date to your last working day.
- Select your reason for leaving: contract end/termination, or resignation.
- Click Calculate Settlement. The tool shows your gross gratuity, the daily wage rate, and the statutory 24-month cap check.
Note: UAE gratuity requires a minimum of 1 full year of continuous service. If you have served less than 12 months, no gratuity is payable.
UAE Gratuity Formula (Federal Decree Law No. 33 of 2021)
Daily Wage = Monthly Basic Salary ÷ 30
For the first 5 years of service:
• Gratuity = Years × 21 × Daily Wage
For service beyond 5 years:
• Gratuity = (5 × 21 × Daily Wage) + ((Years − 5) × 30 × Daily Wage)
Statutory cap: Total gratuity cannot exceed 24 months’ basic salary.
Worked Example
An employee with a basic salary of AED 12,000/month leaves after 6 years and 8 months. Contract ended.
- Daily Wage: 12,000 ÷ 30 = AED 400
- First 5 years: 5 × 21 × 400 = AED 42,000
- Remaining 1.67 years: 1.67 × 30 × 400 = AED 20,040
- Total Award: AED 62,040
- Cap check: 24 × 12,000 = AED 288,000 → no cap applies
The cap matters for long-tenured employees. Someone on AED 15,000/month who has worked 20+ years might calculate a gratuity exceeding AED 360,000, but it would be capped at AED 360,000 (24 months).
Practical Use Cases
- Before accepting a new job offer: Calculate how much gratuity you will lose by leaving before completing your next anniversary year — sometimes waiting 3 extra months adds a full month’s salary to your payout.
- HR payroll verification: Use this tool to cross-check your company’s final settlement statement. The most common error is using total package (including allowances) instead of basic salary.
- Planning remittances: Convert your AED award to PKR or SAR using our Currency Converter to plan your financial move back home, and use our Pakistan inflation calculator to estimate how long those funds will sustain your purchasing power.
- DIFC / ADGM employees: This calculator applies to mainland UAE companies. If you work in DIFC or ADGM, you may fall under their separate workplace savings schemes (DEWS, GPSSA) which have different formulas.
- Relocating within the GCC: If you are considering a career move, you can compare your UAE payout with Saudi Arabia end-of-service benefits, Qatar gratuity rules, or Kuwait employee indemnity.
Common Mistakes to Avoid
- Including allowances in the calculation base: The single most common error in UAE gratuity disputes. Housing, transport, education, and telephone allowances are all explicitly excluded from the base under Article 51 of the Labour Law. Only the basic salary counts.
- Claiming gratuity before 1 year: UAE law sets a strict 12-month minimum. There is no pro-rata gratuity for service shorter than one full continuous year — it is zero.
- Forgetting unpaid leave deductions: Any period taken as unpaid leave is deducted from the total service period. If you took 3 months of unpaid leave across 5 years, your effective service is 4 years and 9 months for gratuity purposes.
Accuracy & Legal Notes
This calculator implements Federal Decree Law No. 33 of 2021 and applies to most private-sector employees on mainland UAE. It does not cover UAE nationals (who receive GPSSA pension contributions), workers in DIFC (governed by DEWS) or ADGM, or domestic workers covered under a separate law. Annual leave encashment is paid separately and is not included in this figure.
For disputes, contact MoHRE through the Tasheel service centres or the MoHRE mobile app. Note that the mandatory Involuntary Loss of Employment (ILOE) insurance scheme provides separate compensation and does not reduce your statutory employer gratuity.
Limited vs Unlimited Contracts Under UAE Labour Law 2022
The UAE's Federal Decree Law No. 33 of 2021 (effective February 2022) made a critical change: all UAE employment contracts are now limited (fixed-term) contracts. The old unlimited contract category no longer exists for new hires. This directly affects your gratuity calculation:
- Before Feb 2022 (Unlimited Contracts): Gratuity on resignation was reduced by a percentage depending on years served (21 days full pay only after 5+ years).
- After Feb 2022 (All contracts are Fixed-Term): Employees are entitled to the full 21 days per year gratuity from day one of eligibility, regardless of whether they resign or are terminated. The resignation penalty is abolished.
- Employees hired before Feb 2022 on unlimited contracts retain their accrued gratuity under the old rules up to Feb 2022, then switch to the new formula for service after that date.
This calculator applies the current law formula. If you were hired before February 2022, your actual gratuity may be a blended calculation — contact MOHRE's official Tasheel service for a precise figure.
What Reduces or Cancels Your UAE Gratuity?
Under UAE Labour Law, your end-of-service gratuity can be reduced or forfeited in specific situations that employees are often unaware of:
- Termination for cause: If dismissed under Article 44 (gross misconduct, fraud, assault, serious policy breach), the employer may apply to waive the gratuity obligation.
- Unpaid loans to employer: If you have an outstanding loan from your employer, they are legally entitled to deduct it from your gratuity before payment.
- DEWS / GPSSA enrollment: Employees enrolled in the DIFC Employee Workplace Savings (DEWS) scheme or Abu Dhabi's GPSSA pension scheme do not receive end-of-service gratuity — they receive their accumulated fund instead.
- Less than 1 year of service: No gratuity entitlement exists if you leave before completing 12 months of continuous employment.
Frequently Asked Questions
What salary is used for UAE gratuity calculation?
Only your monthly basic salary as registered in your MoHRE labour contract. Housing allowance, transportation, phone, and all other allowances are legally excluded from the gratuity base.
Is there a maximum gratuity amount?
Yes. The total gratuity payable cannot exceed 24 months of your basic salary, regardless of how many years you have served. This cap typically only affects employees with very long tenures or high salaries.
Do I lose gratuity if I resign?
Under Federal Decree Law No. 33 of 2021, resignation penalties from the old unlimited contract system no longer apply. If you have served more than 1 year, you are entitled to your full gratuity whether you resign or are terminated.
How long does my employer have to settle my gratuity?
Employers must pay all final entitlements within 14 days of contract termination. Delays beyond this are a violation of UAE Labour Law and can be reported to MoHRE.
What if my employer calculated a different amount?
Ask your HR for a written breakdown of how they reached the figure. The most common sources of error are using total CTC instead of basic salary, incorrect service dates, or miscounting leave periods. If the discrepancy is significant, file a complaint through MoHRE.
📅 Last Updated: April 2026
📋 Source: UAE Federal Decree Law No. 33 of 2021 (MoHRE)
👥 Maintained by AKCalc Team
✍️ Built by Shyraz Habib, creator of AKCalc
✓ Reviewed for accuracy: May 2026
This calculator provides general estimates based on publicly available employment regulations. Actual benefits may vary depending on employer policies and contract terms.