end of service calculator uae

How end of service gratuity works in the UAE

End of service gratuity is a lump-sum benefit paid when an employee leaves a job after meeting the minimum service requirement. In most UAE private-sector cases, gratuity is calculated on the employee’s basic salary, not on allowances such as housing, transport, commissions, or bonuses.

This page gives you a practical estimator so you can plan your finances before resignation, contract completion, or termination. It is especially useful when comparing job offers, negotiating final settlement, or checking payroll calculations.

Quick eligibility checklist

• You must typically complete at least 1 full year of continuous service to qualify for gratuity.
• Gratuity is generally based on your last drawn basic wage.
• Unpaid leave may reduce the counted service period.
• The final gratuity amount is usually capped at the equivalent of 2 years of basic salary.

Formula used by this end of service calculator UAE

The calculator applies a straightforward estimation model commonly used for UAE private-sector gratuity:

• Daily basic wage = Monthly basic salary ÷ 30
• First 5 years = 21 days wage per completed year (pro-rated for partial year)
• After 5 years = 30 days wage per completed year (pro-rated for partial year)
• Total gratuity cap = Maximum of 24 months basic salary

Example calculation

Suppose your basic salary is AED 9,000 and your effective service is 7 years. The first 5 years accrue at 21 days/year, and the remaining 2 years accrue at 30 days/year:

• First 5 years: 5 × 21 = 105 gratuity days
• Next 2 years: 2 × 30 = 60 gratuity days
• Total gratuity days: 165 days
• Daily basic wage: 9,000 ÷ 30 = AED 300
• Estimated gratuity: 165 × 300 = AED 49,500

What counts as basic salary?

A frequent source of confusion is the difference between basic salary and gross package. Your gratuity is usually based on basic salary only. If your offer letter says “AED 12,000 total” but includes AED 7,000 basic + AED 5,000 allowances, gratuity typically uses AED 7,000.

Before relying on any estimate, review your signed contract, salary certificate, and latest payslips. If there are discrepancies, ask your HR department to confirm the official basic wage used for EOSB calculations.

Why your final settlement may differ from an online estimate

• Company payroll may use exact service dates instead of rounded months.
• Unpaid leave and certain breaks in service may reduce eligible duration.
• Outstanding amounts (loans, visa costs where lawful, notice offsets) may be adjusted in final payroll.
• Your case may fall under a special regime (free zone policy, domestic worker rules, or government employment framework).
• Recent legal updates or employer-specific policies may change implementation details.

Frequently asked questions

1) Can I get gratuity if I resign?

In many current private-sector scenarios, employees who complete at least one year are still entitled to gratuity when resigning. However, always verify with your contract terms and latest legal guidance.

2) Is gratuity calculated on gross salary?

No. It is generally calculated on basic salary, not on total compensation including allowances.

3) Do partial years count?

Yes, pro-rated amounts are commonly applied for partial years after completing the one-year minimum.

4) Is gratuity taxable in the UAE?

The UAE does not generally impose personal income tax on salary. Still, your home-country tax obligations may vary, so seek professional tax advice if needed.

Final planning tip

Treat the calculator as a planning tool, then confirm your final number with HR before leaving employment. Keep copies of your contract, offer letter, labor card data, and payslips so you can validate your final settlement with confidence.