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UAE End-of-Service Gratuity Calculator

Calculate your end-of-service gratuity based on UAE Federal Decree-Law No. 33 of 2021. Switch between employee and employer modes. Includes a 20-year forecaster.

By Alex Thorp, who has set up 40+ UAE businesses · Updated

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Less than 1 year of service = no gratuity entitlement.

Your Gratuity Estimate

AED 0

~$0 USD · ~£0 GBP · ~€0 EUR · ~₹0 INR

Breakdown

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How UAE Gratuity Is Calculated

Under the UAE Labour Law (Federal Decree-Law No. 33 of 2021), end-of-service gratuity is calculated as follows:

  • Less than 1 year: No gratuity entitlement.
  • 1 to 5 years: 21 days of basic salary for each year worked.
  • More than 5 years: 30 days of basic salary for each year beyond the fifth.
  • Cap: Total gratuity cannot exceed 2 years' worth of basic salary.
  • Basic only: Gratuity is calculated on basic salary only — housing, transport, and other allowances are excluded.
  • Resignation vs termination: Both entitle you to full gratuity if you've completed at least 1 year (under the new law).

Daily rate formula: Basic Monthly Salary × 12 ÷ 365.

Frequently Asked Questions

How is gratuity calculated in the UAE?
UAE gratuity is calculated on basic salary only (excluding allowances). Employees with 1-5 years of service receive 21 days of basic pay per year. For service beyond 5 years, the rate increases to 30 days per year for those additional years. Total gratuity is capped at two years' basic salary.
Do I get gratuity if I resign?
Yes. Under Federal Decree-Law No. 33 of 2021, employees who complete at least one year of service are entitled to full end-of-service gratuity regardless of whether they resigned or were terminated.
Is gratuity calculated on basic salary or total salary?
Gratuity is calculated on basic salary only. Allowances such as housing, transport, and education are excluded. This is why your gratuity may be lower than expected if a large portion of your package is in allowances.
Is there a cap on UAE gratuity?
Yes. Total end-of-service gratuity cannot exceed two years' worth of basic salary, regardless of how long you've worked.
Does gratuity apply in DIFC and ADGM?
DIFC and ADGM operate under different rules. DIFC employees are typically enrolled in the DEWS savings scheme rather than receiving traditional gratuity. ADGM has its own end-of-service framework. This calculator follows mainland and standard free zone UAE Labour Law rules.
Can my employer deduct anything from my gratuity?
Employers may deduct outstanding loans, salary advances, or training cost recovery (only if specified in your contract and within UAE law limits). They cannot deduct gratuity as a penalty for resignation, and cannot withhold gratuity from an employee who has completed 1+ year of service. If your employer disputes payment, you can file a free complaint with the Ministry of Human Resources and Emiratisation (MOHRE).
What happens to my gratuity if my company goes bankrupt?
Employee end-of-service gratuity is treated as a privileged debt under UAE law and ranks ahead of most other creditors in a liquidation. However, actual recovery depends on whether the company has assets remaining after secured creditors are paid. To eliminate this risk, some employers — and most DIFC companies — place gratuity into a regulated savings scheme (such as DEWS) where the funds are ring-fenced from the employer's balance sheet.
Do I pay tax on UAE gratuity?
In the UAE itself, no — there's no personal income tax, so your gratuity is paid out in full. However, if you become tax-resident in another country (or repatriate to one), your home country may treat gratuity as taxable income. UK, US, and Indian tax residents in particular should check their own tax obligations before repatriating large lump-sum gratuity payments — timing the move to a different tax year can sometimes save thousands.

Worked example: Marta's gratuity after 7 years

Marta works as a marketing manager in Dubai. Her basic monthly salary is AED 18,000, and her total package is AED 30,000 including housing and transport allowances. She resigns after exactly 7 years of service.

Note: her gratuity is calculated only on the AED 18,000 basic, not the full AED 30,000 package — saving the employer roughly 40% versus calculating on total compensation. This is why the basic-to-allowance split in your contract matters more than most employees realise. If Marta had negotiated a 70/30 basic-to-allowance ratio (instead of the typical 60/40), her gratuity would have been ~AED 113,000 — a difference of ~AED 15,000 over 7 years on the same total package.

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Disclaimer: This calculator provides estimates for informational purposes only and does not constitute legal advice. UAE labour law is subject to change and individual circumstances may affect entitlement. For binding advice, consult a UAE-licensed legal advisor or MOHRE.