Free tool
UAE end-of-service gratuity calculator
- 2022 law
- Resignation = full gratuity
- No email required
Employee details
Basic wage only — gratuity is calculated on basic, not gross.
Gross, including allowances. Used only for the two-year cap.
Unpaid leave does not count toward the service period.
End-of-service gratuity
AED 31,553
- Service period
- 6y 9m (2467 days)
- Daily basic wage
- AED 200
- Gratuity days earned
- 157.8 days
How this is calculated
21 days' basic wage for each of the first five years, then 30 days' basic wage for each year beyond five, pro-rated for part years, on a daily rate of basic ÷ 30. Capped at two years' total wage. Unpaid leave is deducted from the service period.
Not included: accrued untaken annual leave, notice pay, air ticket or repatriation costs, or any contractual enhancement above the statutory minimum. Gratuity may be forfeited where employment ends under Article 44 (dismissal for gross misconduct).
The rules
How UAE gratuity works
First 5 years — 21 days
21 calendar days' basic wage for each year of service, pro-rated for part years once the first full year is complete.
Beyond 5 years — 30 days
30 calendar days' basic wage for each additional year. The first five years stay at the 21-day rate; the higher rate applies only to the excess.
Capped at 2 years' wage
Total gratuity cannot exceed two years' total wage. This binds only on very long service, but the calculator applies it.
The change most calculators have missed
Before February 2022, an employee who resigned received only one third of their gratuity at 1–3 years of service, and two thirds at 3–5 years. Federal Decree-Law No. 33 of 2021 removed those reductions entirely. If you are budgeting from an older spreadsheet or a calculator that still asks "resigned or terminated?" and changes the answer, you are very likely under-providing for this liability.
This is general information, not legal advice. Entitlements depend on your specific contracts, the employee category, the reason employment ended and any contractual enhancement above the statutory minimum. Free zones such as DIFC and ADGM operate their own employment regimes, including DIFC's DEWS savings scheme in place of end-of-service gratuity. Confirm the position with your PRO or a qualified UAE labour adviser before paying or withholding.
Questions
Gratuity — FAQ
Is gratuity calculated on basic salary or gross salary?
On the basic wage, excluding allowances such as housing, transport and mobile. This is the single most common error in manual calculations, and it works in the employer's favour — which is exactly why employees challenge it. The gross figure matters only for the two-year cap.
Does an employee who resigns still get full gratuity?
Yes, under the current law. Federal Decree-Law No. 33 of 2021, in force since February 2022, removed the old reductions that cut gratuity to one third for 1–3 years of service and two thirds for 3–5 years on resignation. An employee who completes one year now receives the same gratuity whether they resign or are terminated. Many online calculators still apply the old rule and understate the liability.
How much gratuity is payable after less than one year?
None. Gratuity requires one completed year of service. Other end-of-service entitlements — accrued untaken annual leave, notice pay and outstanding wages — are separate and may still be due.
Is there a maximum gratuity?
Yes. Total gratuity cannot exceed two years' wage. In practice this only binds on very long service, typically beyond about 30 years, but the calculator applies it and tells you when it has.
Does unpaid leave count toward the service period?
No. Periods of unpaid leave are excluded from the length of service used to calculate gratuity, which is why the calculator asks for them separately.
Can an employee lose their gratuity?
It can be forfeited where employment is terminated under Article 44 of the Labour Law — dismissal for gross misconduct. That is a narrow list of grounds and a high bar, so take legal advice before withholding gratuity on that basis.
What does this have to do with attendance systems?
Gratuity rests on the service period, and service period rests on records — start date, last working day and unpaid leave. Employers who cannot evidence unpaid leave days tend to concede them in a dispute. An attendance system that records leave and absence properly is what makes the gratuity figure defensible.
Make the service record defensible
Gratuity rests on start date, last working day and unpaid leave. Employers who cannot evidence unpaid leave days tend to concede them. Tell us your headcount and we will quote a system that records leave and absence against a tamper-evident attendance log.
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