UAE End of Service Gratuity Calculator
Use this tool to estimate your end of service gratuity in the UAE based on your basic salary and total service period.
What is gratuity in the UAE?
Gratuity (also called end-of-service benefit) is a lump-sum amount paid to employees when their employment ends, provided they complete at least one year of continuous service. In the UAE private sector, gratuity is generally calculated from the employee’s last drawn basic salary, not total salary package.
Many employees confuse basic salary with gross salary. This matters because allowances such as housing, transportation, commission, and overtime are usually not included in gratuity computation. If you want a realistic estimate, always check the basic salary shown in your employment contract and latest payslip.
Quick formula used by this calculator
1) Convert monthly basic salary to daily wage
Daily basic wage = Basic monthly salary ÷ 30
2) Determine gratuity days
- For the first 5 years of service: 21 days basic wage per year.
- For each year after 5 years: 30 days basic wage per year.
- Service less than 1 year: generally no gratuity entitlement.
3) Apply resignation adjustment if legacy method is selected
For older unlimited-contract style calculations (legacy), resignation may reduce entitlement:
- 1 to less than 3 years: 1/3 of gratuity
- 3 to less than 5 years: 2/3 of gratuity
- 5 years and above: full gratuity
4) Apply legal cap
Total gratuity cannot exceed the equivalent of two years of basic salary.
How to use the gratuity in UAE calculator correctly
- Enter your basic monthly salary only.
- Enter total service duration (years, months, and days).
- Choose the appropriate legal method (current or legacy).
- Select whether you resigned or your employment ended by employer/contract completion.
- Click Calculate Gratuity to see your estimate and breakdown.
Worked example
Suppose your basic salary is AED 9,000 and your service is 6 years exactly under current rules:
- Daily wage = 9,000 ÷ 30 = AED 300
- First 5 years = 5 × 21 = 105 days
- Next 1 year = 1 × 30 = 30 days
- Total gratuity days = 135
- Estimated gratuity = 135 × 300 = AED 40,500
The calculator automates this and gives a clean summary instantly.
Common mistakes to avoid
- Using gross salary instead of basic salary.
- Ignoring partial months/days of service.
- Using old resignation rules for all cases.
- Forgetting the two-year salary cap.
- Assuming free zone and mainland policies are always identical in administration.
Frequently asked questions
Is gratuity taxable in the UAE?
UAE employment income is generally not subject to personal income tax. However, cross-border tax treatment can differ for expatriates based on home-country rules.
Does unpaid leave affect gratuity?
It can. Depending on policy and legal interpretation, some unpaid periods may not count fully toward gratuity service. Confirm with HR for your exact case.
Do allowances count in gratuity?
Usually no. Gratuity is typically based on basic pay only unless a contract explicitly provides better terms.
Is this calculator legally binding?
No. It is for planning and estimation. Your final settlement should be confirmed by your employer, MOHRE guidance, or a qualified legal advisor.
Final note
A gratuity payout can be a meaningful financial amount. Estimating it early helps with better decisions around resignation timing, savings targets, debt payoff, and relocation planning. Use this calculator as a practical first step, then verify your final numbers with official records before your exit process.