Here, you can easily find out how much end-of-service pay you are entitled to. Our tool calculates your gratuity based on your basic salary and other important details. It follows MOHRE guidelines, making it a trusted resource for all employees across the UAE. In the United Arab Emirates (UAE), gratuity is an essential financial benefit granted to employees at the end of their service.

If an employee resigns, is terminated, or completes their contract, they may be eligible for a gratuity payment. Calculating gratuity can be complex, given the factors involved, such as contract type, duration of service, and basic salary. We will help you understand the UAE gratuity calculation rules and how to use a gratuity calculator effectively.

What is Gratuity in UAE?

Gratuity is a form of end-of-service compensation provided by employers in the UAE. It is designed to support employees financially after they leave their job. Governed by UAE Labour Law, gratuity applies to both expatriates and Emirati employees working in the private and public sectors. To qualify for gratuity, an employee must have completed at least one year of continuous service with the same employer. The amount payable depends on factors such as:

• Last drawn basic salary
• Total years of service
• Reason for employment termination
• Type of contract (Limited or Unlimited)

Who is Eligible for Gratuity?

In the UAE, gratuity is a well-deserved reward for your hard work once your employment ends. If you’ve completed at least one full year with the same employer, you qualify for an end-of-service gratuity. This applies regardless of how your job ends—whether through resignation, termination, or simply the natural conclusion of your contract. Eligibility covers a wide range of employees, including:

• Local and foreign workers are entitled to gratuity.
• Gender does not affect your eligibility.
• Employees on a fixed-term or open-ended contract, you can receive gratuity.
• Employees in both permanent roles and temporary positions qualify.
• This benefit is available to those in federal government positions as well as private companies.
• If you resign, are terminated, or complete your contract or retirement, you can receive gratuity.
• Remember, if you have worked for less than a year, you won’t be eligible for this benefit, as the law requires a minimum of one year of service.

What is the UAE Gratuity Calculator?

Our UAE Gratuity Calculator is a user-friendly online tool designed to help you quickly determine your end-of-service benefits. Whether you work in Dubai, Abu Dhabi, Sharjah, Ajman, or any other emirate, this calculator makes it simple to compute your gratuity based on your basic salary and other essential details. And the best part is that it’s completely free! You can check Live Gratuity Calculator UAE above.

This UAE Gratuity Calculator is available for every employer residing in Dubai through which they can calculate Gratuity easily. If you’re in Dubai, you can use it as your go-to Gratuity Calculator Dubai for quick results. For those in Abu Dhabi, it works just as well as a Gratuity Calculator Abu Dhabi. And if you’re in Sharjah, you’ll find it equally useful for calculating your benefits. This tool follows the MOHRE guidelines, ensuring that you receive accurate and reliable calculations every time you use it.

How to Use the Gratuity Calculator.

A UAE Gratuity Calculator simplifies the process of determining your end-of-service benefit. Without using any formula you can use UAE Gratuity Calculator by following these steps to calculate your gratuity:

1. Enter your last basic salary (without allowances or bonuses).
2. Select contract type – Limited or Unlimited.
3. Select the reason for employment end – Resignation, Termination, or End of Contract.
4. Enter your first working day (DD-MM-YYYY format).
5. Enter your last working day (DD-MM-YYYY format).
6. Click on ‘Calculate’ to view the gratuity amount.

The calculator will display the total gratuity amount, along with a detailed breakdown of your entitlement based on your service period.

Factors Affecting Gratuity Calculation in UAE

Gratuity is a key benefit for employees working in the United Arab Emirates (UAE). It provides financial security at the end of service and is calculated based on different factors. If you’re working in the UAE, understanding these factors will help you estimate the amount you can expect when leaving your job.

1. Type of Contract (Limited or Unlimited)

The type of employment contract plays a big role in gratuity calculation. There are two types:

• Limited Contract: If you complete your contract term, you are entitled to full gratuity. If you resign before completing the term, you may not receive gratuity.
• Unlimited Contract: The calculation depends on the length of service. Employees who resign before completing five years receive a reduced amount.

2. Last Basic Salary.

The most critical factor in gratuity calculation in the UAE is the last drawn basic salary. It is important to note that allowances such as housing, transport, overtime, and other benefits are not included in the gratuity calculation. Only the fixed basic salary is considered. If you are an employee, you should focus on your basic pay when estimating gratuity. If you are an employer, only the employee’s basic salary should be used for the calculation, excluding any additional perks.

3. Reason for Employment Termination.

The gratuity calculation method differs based on how the employment ends. The following two scenarios affect the final payout:

• Termination by Employer: If an employee is terminated without serious misconduct, gratuity is calculated based on service duration and contract type.
• Resignation by Employee: If an employee resigns before completing five years, the gratuity amount is reduced, especially under an unlimited contract. Employees under limited contracts may forfeit gratuity if they resign before the contract period ends.

4. Total Years of Service.

Your years of service directly impact how much gratuity you receive.

• Less than 1 year: No gratuity.
• 1 to 3 years: 7 days’ basic salary per year.
• 3 to 5 years: 14 days’ basic salary per year.
• More than 5 years: 21 days’ basic salary per year for the first five years, and 30 days’ salary for each additional year.

5. Unpaid Leave.

Unpaid leave periods are not counted as part of service years. If you take extended unpaid leave, your gratuity amount may decrease.

6. Misconduct or Dismissal Under Article 120.

If an employer dismisses an employee under Article 120 of UAE Labour Law, gratuity may not be granted. This includes fraud, dishonesty, or violating workplace rules.

Gratuity should be correctly calculated based on labour laws.

Employers might miscalculate, so always check your company’s policies and seek legal advice if needed.

Essential Points About Gratuity in the UAE.

Here are some key details every employee and employer should understand regarding gratuity:

• Gratuity is calculated using only the final basic salary. This means that any additional benefits, such as housing, transport, or overtime allowances, are not included, and no deductions are made from the basic salary.
• To be eligible for gratuity, an employee must have completed at least one full year of service with the current employer.
• If an employee is found responsible for damaging or causing a loss to company property or equipment, they may lose their right to receive gratuity.
• Employers may withhold gratuity benefits if an employee fails to meet the essential duties specified in their job role.
• Should an employee owe any money to the company, the outstanding amount can be deducted from their gratuity payment.
• The total gratuity benefit is capped and cannot exceed the equivalent of two years’ salary.

Gratuity Calculation Formula for Limited Contract.

For employees on a limited contract (one that ends on a fixed term, usually linked to the residency visa), gratuity is calculated when the contract is fully completed.

1. Determine Your Daily Wage: Divide your last basic salary by 30.
2. Calculate for Service Up to 5 Years: Multiply the number of years served by 21 days’ wage.Formula: Gratuity = Service Years × 21 Days × (Last Basic Salary)/30
3. Calculate for Service Exceeding 5 Years: For the first 5 years, calculate as above. For every additional year beyond 5 years, use 30 days’ wage.Formula: Gratuity = 5 × 21 Days × (Last Basic Salary)/30 + ((Total Years – 5 ) × 30 × (Last Basic Salary)/30)
4. Cap on Gratuity: The overall gratuity cannot exceed the equivalent of two years’ basic salary.

Note: In limited contracts, gratuity is usually only payable upon the full completion of the contract term. Leaving early may affect your eligibility.

Gratuity Calculation Formula for an Unlimited Contract.

For employees on an unlimited contract (an open-ended agreement that can end by either party), the basic method remains the same if the employer terminates the contract.

1. Determine Your Daily Wage: Daily Wage = Last Basic Salary ÷ 30
2. If the Employer Terminates Your Service:
3. For Service Up to 5 Years: Gratuity = Number of Years × 21 × (Last Basic Salary/30)
4. For Service Exceeding 5 Years: Gratuity = 5 × 21 Days × (Last Basic Salary)/30 + ((Total Years − 5) × 30 × (Last Basic Salary/30))
5. If You Resign Voluntarily: If the employment ended by resignation of the employee, consider following rules for gratuity calculation for an unlimited contract.
   

Service Period	Gratuity Calculation Rules
If an Employee Resigns in Less than 1 Year	No Gratuity will be Paid.
If an Employee Resigns in 1-3 Years of Service	1/3rd of 21 Days Basic Salary for Each Service Year will be Paid.
If an Employee Resigns in 3-5 Years of Service	2/3rd of 21 Days Basic Salary for Each Service Year will be Paid as Gratuity.
If an Employee Resigns after 5 Years of Service	For First 5 Years – 21 Days Basic Salary for Each Service Year will be Paid as Gratuity. From 6th Year – 30 Days Basic Salary for Each Service Year will be Paid as Gratuity.

1 to 3 Years: Gratuity = [Last Basic Salary x 21 Days x 1/3 x Completed Years of Service] ÷ 3

3 to 5 Years: Gratuity = [Last Basic Salary x 21 Days x 2/3 x Completed Years of Service] ÷ 30

After 5 Years: First 5 Years: Gratuity = [Last Basic Salary x 21 Days x Completed Years of Service] ÷ 30

After 5 Years: Gratuity = [Last Basic Salary x 30 Days x Completed Years of Service from 6th Year] ÷ 30

For Termination or End of Contract.

If the employment is ended by termination of the employee or end-of-contract, consider the following rules for gratuity calculation for an unlimited contract.

Service Period	Gratuity Calculation Rules
If an Employee is Terminated in Less than 1 Year	No Gratuity will be Paid.
If an Employee is Terminated in 1-5 Years of Service	21 Days Basic Salary for Each Service Year will be Paid as Gratuity.
If an Employee is Terminated after 5 Years of Service	For First 5 Years – 21 Days Basic Salary for Each Service Year will be Paid as Gratuity. From 6th Year – 30 Days Basic Salary for Each Service Year will be Paid as Gratuity.

For First 5 Years: Gratuity = [Last Basic Salary x 21 Days x Completed Years of Service] ÷ 30. After 5 Years: Gratuity = [Last Basic Salary x 30 Days x Completed Years of Service from 6th Year] ÷ 30. These formulas provide a clear method to estimate your end-of-service benefits based on your contract type and length of service.

Employers are required to calculate this benefit using the formulas and guidelines provided above.Gratuity is awarded only to employees who have served with the same company for at least one year.

Conclusion.

We have explained this free gratuity calculator that helps UAE employees estimate their end-of-service benefits according to MOHRE guidelines. Also explained that gratuity is determined by factors such as basic salary, contract type, and years of service, and is available to employees after one year of continuous service. The tool provides clear formulas for both limited and unlimited contracts, simplifying the calculation process.

Disclaimer.

The Gratuity Calculator UAE provided on this website is intended solely for calculating gratuity amounts for individuals or organizations. While every effort has been made to ensure the accuracy of the calculated gratuity, this tool does not constitute legal advice or guarantee any legal standing. In the event of any dispute or discrepancy regarding gratuity calculations, the affected employer and employee(s) are advised to contact the UAE Labour Department or the Ministry of Human Resources & Emiratisation (MOHRE) for official guidance.