How to Calculate Gratuity in UAE: Under UAE Labour Law, eligible full-time expatriate employees in the private sector generally receive 21 days of basic wage for each of the first five years of service and 30 days for every additional year.

However, the final amount depends on your last basic salary, completed service period, unpaid leave and applicable employment regulations. Here is how to calculate your UAE gratuity with practical examples.

How to Calculate Gratuity in UAE

For eligible full-time expatriate employees working in the UAE mainland private sector, the gratuity calculation is based on the last basic wage.

The calculation follows two rates:

  • First five years: 21 days of basic wage for each year.

  • After five years: 30 days of basic wage for each additional year.

The total gratuity cannot exceed two years of wage.

UAE Gratuity Calculation Formula

First, calculate your daily basic salary:

Daily Basic Salary = Monthly Basic Salary ÷ 30

Then use the following formulas.

For up to five years of service:

Gratuity = Daily Basic Salary × 21 × Years of Service

For more than five years of service:

Gratuity = (Daily Basic Salary × 21 × 5) + (Daily Basic Salary × 30 × Additional Years)

Employees who complete at least one year of continuous service are also entitled to a proportionate amount for additional incomplete years.

UAE Gratuity Calculation Examples Based on Salary

Understanding the formula becomes easier when you calculate the amount using actual salary figures.

Suppose your monthly basic salary is AED 5,000.

Your daily basic salary will be:

AED 5,000 ÷ 30 = AED 166.67

Based on this amount, your estimated gratuity would be:

Years of Service Estimated Gratuity
1 year AED 3,500
2 years AED 7,000
3 years AED 10,500
4 years AED 14,000
5 years AED 17,500
6 years AED 22,500
7 years AED 27,500
8 years AED 32,500
10 years AED 42,500
15 years AED 67,500

These examples assume continuous eligible service, no unpaid absence and a constant final basic salary of AED 5,000. They are illustrative calculations rather than individual settlement amounts.

Example: Gratuity After Seven Years

Suppose an employee has worked for a company for seven years and receives a monthly basic salary of AED 5,000.

The first five years:

AED 166.67 × 21 × 5 = AED 17,500

The remaining two years:

AED 166.67 × 30 × 2 = AED 10,000

Total Gratuity = AED 27,500

This is the amount before any legally permitted deductions.

Is UAE Gratuity Calculated on Basic Salary or Gross Salary?

One of the most important things employees should check before calculating gratuity is the basic salary mentioned in their employment contract.

UAE gratuity is generally calculated using the last basic wage, not the full monthly salary package.

For example, consider an employee receiving the following monthly salary:

Salary Component Amount
Basic Salary AED 4,000
Housing Allowance AED 2,000
Transport Allowance AED 1,000
Other Allowances AED 500
Total Monthly Salary AED 7,500

Although the employee receives AED 7,500 every month, the general mainland gratuity calculation uses AED 4,000 as the basic salary.

This means allowances such as housing and transportation are generally not included in the calculation.

Employees should check their employment contract and final basic wage carefully before estimating their end-of-service benefits.

Do You Get Gratuity If You Resign in UAE?

Yes. Under the current UAE Labour Law, eligible employees generally retain their gratuity entitlement even when they resign voluntarily.

For eligible mainland private-sector expatriate employees, the old system of reducing gratuity simply because an employee resigned is no longer the general rule.

You may qualify for gratuity when:

  • You resign from your job.

  • Your employer terminates your employment.

  • Your employment contract expires.

  • You leave the company after completing the required service period.

However, employees whose employment began before 2 February 2022 should check the transitional provisions under Article 68, particularly where an old unlimited-term contract is involved.

Therefore, the start date and employment contract history can be important when calculating gratuity.

How Much Gratuity Do You Get After One Year in UAE?

An eligible full-time expatriate employee generally becomes entitled to end-of-service gratuity after completing one year of continuous service.

The following table explains the basic eligibility:

Employment Duration Gratuity Eligibility
6 months Not eligible
9 months Not eligible
11 months Not eligible
1 year Eligible
2 years Eligible
5 years Eligible

Once the employee completes one year, additional incomplete years are also calculated proportionately.

For example, an employee who completes three years and six months can receive gratuity for the additional six months as well.

The probation period is generally included in continuous service if the employee successfully completes probation and continues working for the same employer.

Does Unpaid Leave Affect Gratuity in UAE?

Yes. Unpaid leave can reduce the service period used for gratuity calculation.

Under Article 51 of UAE Federal Decree-Law No. 33 of 2021, days of absence without pay are excluded from the service period.

For example, if an employee has worked for five years but taken 60 days of unpaid leave, those 60 days are excluded when determining the eligible service period.

Paid annual leave should not be treated in the same way as unpaid absence.

UAE Gratuity Rules for Part-Time Employees

Part-time employees can also qualify for end-of-service gratuity under the applicable UAE regulations.

However, their gratuity is calculated proportionately according to their contracted working hours compared with full-time working hours.

The general calculation is:

Part-Time Gratuity = Full-Time Gratuity × Part-Time Working Hours Percentage

For example, if an employee works 50% of the comparable full-time annual hours and the equivalent full-time gratuity is AED 20,000, the illustrative part-time gratuity would be AED 10,000.

The calculation is subject to the applicable employment arrangement and eligibility conditions.

When Should Employers Pay Gratuity in UAE?

Under Article 53 of the UAE Labour Law, employers must pay employees their outstanding wages and other end-of-service entitlements within 14 days from the date their employment contract ends.

This generally includes:

  • Outstanding salary.

  • End-of-service gratuity.

  • Other legally payable employment benefits.

If an employer delays the payment or calculates the amount incorrectly, the employee can raise a labour complaint with the Ministry of Human Resources and Emiratisation (MOHRE), where the employment falls under its jurisdiction.

Can an Employer Refuse to Pay Gratuity?

An employer cannot generally refuse eligible gratuity simply because an employee resigns or is terminated.

However, entitlement and the final amount depend on the applicable law, service period and employment records.

Some common reasons for gratuity disputes include:

  • The employee has not completed one year of continuous service.

  • The employer has calculated the basic salary incorrectly.

  • Unpaid absence has not been accounted for correctly.

  • The employment start or termination date is disputed.

  • The employer has made deductions that the employee believes are unlawful.

Article 39 also distinguishes disciplinary dismissal from the employee's entitlement to end-of-service gratuity. Dismissal for misconduct does not automatically cancel gratuity under the current general private-sector rules.

Employees who believe their rights have been violated can contact MOHRE through its official channels.

Gratuity Rules in DIFC and ADGM

Not every employee in Dubai and Abu Dhabi follows the same gratuity system. The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) have separate employment regulations.

DIFC: Eligible employees are generally covered by the DIFC Employee Workplace Savings (DEWS) arrangement or another qualifying scheme. The standard employer contribution rates are 5.83% of monthly basic wage for the first five years and 8.33% thereafter, subject to applicable exemptions and qualifying-scheme arrangements.

ADGM: Its Employment Regulations provide a separate end-of-service gratuity calculation. The standard rates are 21 days for each of the first five years and 30 days for each additional year. Unlike the usual mainland monthly salary convention, ADGM calculates daily basic wage by dividing annual basic wage by 365.

Employees should identify whether their employer is registered under mainland UAE rules, DIFC or ADGM before using a gratuity calculator.

What Is the UAE End-of-Service Savings Scheme?

The UAE also offers an alternative to the traditional gratuity system through the voluntary End-of-Service Benefits Savings Scheme.

Employers who participate in this scheme make monthly contributions to approved investment funds for enrolled employees.

The standard contribution rates for eligible full-time employees are:

  • 5.83% of monthly basic salary for employees with less than five years of service.

  • 8.33% for employees with five years or more of service.

Employees may also make additional voluntary contributions.

However, participation is not automatically compulsory for every private-sector employer. The employer must join the scheme, and the applicable enrolment and settlement rules must be followed.

How to File a Complaint for Unpaid Gratuity in UAE

If your employer has not paid your eligible gratuity, you can contact MOHRE to seek assistance.

Employees can use the following official channels:

  • MOHRE website.

  • MOHRE mobile application.

  • Labour Claims and Advisory Centre.

MOHRE Helpline: 80084

Keep copies of your employment contract, salary records, resignation or termination letter and final settlement documents when raising a complaint.

The general limitation period for employment claims under Article 54 should also be considered. Different rules may apply to domestic workers and employees under separate employment jurisdictions.

Frequently Asked Questions About UAE Gratuity

1. What is the gratuity formula in UAE?

Eligible mainland full-time expatriate employees generally receive 21 days of basic wage for each of the first five years and 30 days for each additional year. The total cannot exceed two years of wage.

2. Is gratuity calculated on basic salary in UAE?

Yes. Under the general mainland private-sector rules, gratuity is calculated using the employee's last basic wage rather than the total salary package.

3. How much gratuity do I get after five years in UAE?

If your monthly basic salary is AED 5,000, your estimated gratuity after five years is AED 17,500.

4. Do I get full gratuity if I resign in UAE?

Generally, yes. Under the current mainland private-sector rules, eligible employees do not lose gratuity simply because they resign. Transitional provisions may affect certain older employment contracts.

5. What is the minimum service required for gratuity in UAE?

Eligible employees generally need to complete at least one year of continuous service to qualify for gratuity under Article 51.

6. How many days does a company have to pay gratuity?

Under Article 53, employers generally have 14 days from the employment contract's termination date to settle outstanding wages and other end-of-service entitlements.

7. Does unpaid leave affect UAE gratuity?

Yes. Days of absence without pay are excluded from the service period used for gratuity calculation.

8. Is gratuity different in DIFC and ADGM?

Yes. DIFC generally follows its workplace savings arrangements, while ADGM has separate end-of-service gratuity regulations. Mainland employees follow the applicable federal employment rules.

9. What is the maximum gratuity in UAE?

Under the general Article 51 calculation, total end-of-service gratuity cannot exceed two years of wage.

10. Can I claim gratuity if my employer terminates me?

Yes. An eligible employee generally retains gratuity entitlement even when the employer terminates the employment contract, subject to the applicable legal conditions.

Final Note

Before leaving a job in the UAE, check your last basic salary, employment start date, unpaid leave and applicable employment regulations. These details can make a significant difference to your final settlement.

For the most reliable information, refer to the UAE Government and MOHRE rather than relying entirely on third-party gratuity calculators.

Official References: