Understanding your end-of-service benefits is essential. Yet many employees in the UAE find gratuity calculations confusing; a gratuity calculator can be helpful. It offers a simple way to estimate what you may receive at the end of your employment. It also helps employers stay aligned with labour law requirements.
Many employees only think about end-of-service benefits at the last moment, which can lead to uncertainty or unrealistic expectations. Having a precise estimate in advance allows you to plan your finances better and avoid surprises.
In this guide, you will find a gratuity calculator for UAE employees and everything you need to know before leaving a job, allowing you to make informed decisions with the utmost confidence.
- Online UAE Gratuity Calculator
- Understanding Gratuity Under UAE Labour Law
- How the UAE Gratuity Calculator Works
- UAE Gratuity Calculation Formula Explained
- Practical Example of the UAE Gratuity Formula
- UAE Gratuity Calculator Disclaimers
- Key Takeaways
- FAQs
Online UAE Gratuity Calculator
Enter your details below to calculate your UAE gratuity instantly!
UAE Gratuity Calculator
Gratuity, also known as an end-of-service benefit, is a statutory payment made to eligible employees upon termination of employment. The UAE Labour Law governs it and applies to most private-sector employees.
It is also worth noting that the Dubai Development Authority offers an online tool to calculate gratuity.
Understanding Gratuity Under UAE Labour Law
Gratuity is a legal right, not a bonus. It rewards employees for completing a period of service. However, eligibility depends on meeting certain conditions.
In general, employees become eligible after completing at least one full year of continuous service. Anything less usually does not qualify, except in specific cases outlined by law.
In fact, recent labour law reforms aim to standardise employee rights, but individual contracts and workplace policies may still play a role. For this reason, gratuity calculations should constantly be reviewed alongside official employment documents.
How the UAE Gratuity Calculator Works
Using the calculator is user-friendly and straightforward. You need to provide a few key details, and the tool does the rest.
Required inputs:
- Basic salary
- Employment start date:
- Employment end date
- Unpaid absence days (if applicable)
It is important to note that gratuity is calculated only on basic salary. Other allowances, like housing or transport, are excluded. Entering your total salary instead of your basic salary may give inaccurate results.
Use the UAE Gratuity Calculator above to instantly estimate your end-of-service benefit.
UAE Gratuity Calculation Formula Explained
The UAE Labour Law provides a clear framework for gratuity calculation.
Standard Formula
- Calculate your daily basic salary (monthly basic ÷ 30).
- Apply the gratuity rate based on years of service:
- 1–5 years: 21 days per year
- Beyond 5 years: 30 days per year for each additional year
- Ensure the total does not exceed the two-year salary cap.
Keep in mind that manual gratuity calculations often lead to errors, mainly when service periods include partial years or unpaid leave. A UAE gratuity calculator helps avoid these issues by automatically applying the correct legal formula.
Gratuity for Less Than One Year of Service
Employees who have worked for less than one year are typically not entitled to gratuity.
Practical Example of the UAE Gratuity Formula
Let’s break the formula down using a realistic example.
Assuming that an employee has a basic monthly salary of AED 6,000 and has completed 7 years of service.
- Step 1: Calculating the daily basic salary
Daily salary = AED 6,000 ÷ 30 = AED 200
- Step 2: Calculate gratuity for the first five years
Gratuity rate = 21 days per year
21 days × 5 years = 105 days = AED 21,000
- Step 3: Calculate gratuity for service beyond five years
Remaining service = 2 years
Gratuity rate = 30 days per year
30 days × 2 years = 60 days = AED 12,000
- Step 4: Calculate total gratuity payable
AED 21,000 + AED 12,000 = AED 33,000
- Step 5: Check the maximum gratuity cap
Two-year salary cap = AED 6,000 × 24 months = AED 144,000
Since AED 33,000 is below the legal cap, the full amount is payable.
This is the same logic used by any Gratuity Calculator in the UAE.
UAE Gratuity Calculator Disclaimers
The results from the built-in UAE gratuity calculator are estimates. They are not legal advice and depend on accurate data entry. Some exceptional cases may not be fully covered.
Always confirm final figures with your HR team or a legal professional.
Also, certain situations may require additional review, such as employment disputes, disciplinary terminations, or contracts with special gratuity clauses. In these cases, the calculator should be used as a reference only, and professional advice is recommended to confirm final entitlements.
Key Takeaways
Gratuity is a statutory end-of-service benefit under the UAE Labour Law and is calculated based only on basic salary. Employees generally become eligible after completing one full year of continuous service. The calculation follows a fixed legal formula, with 21 days’ salary per year for the first five years and 30 days per year thereafter, subject to a two-year salary cap.
Our UAE Gratuity Calculator simplifies this process by applying the correct rules instantly and reducing manual errors. However, results remain estimates, so final amounts should always be verified with HR or legal professionals before making employment decisions.
FAQs
Divide your basic monthly salary by 30 to get your daily wage. Multiply it by 21 days per year for the first five years and 30 days per year for any additional years. The total gratuity must not exceed two years’ basic salary. Our UAE Gratuity Calculator can calculate this instantly.
No. Only the basic salary is used for calculation.
Gratuity pay is calculated based on basic salary and years of service. Employees receive 21 days of basic salary per year for the first five years and 30 days per year thereafter, with a maximum of two years’ basic salary.
The maximum is capped at two years’ basic salary, regardless of service length.
Yes, provided you meet eligibility requirements, the calculator applies the correct formula.
No. Gratuity is not subject to personal income tax in the UAE.
