UAE Gratuity and End of Service Calculator 2026
UAE employer tools · Updated November 2026
Work out end-of-service gratuity for a private-sector employee in the UAE. Enter the last basic salary, the start and end dates and any unpaid leave. The calculator applies Federal Decree-Law No. 33 of 2021 and shows each step, so HR teams and employees can check the result.
Results are estimates for planning. They are not legal advice. Unused leave, notice pay and other final dues are paid separately.
How UAE Gratuity Is Calculated
End-of-service gratuity is a lump sum the employer pays when the contract ends. It is set by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations.
| Service | Gratuity days earned | Example on AED 12,000 basic |
|---|---|---|
| Less than 1 year | None | AED 0 |
| 1 year | 21 days | AED 8,400 |
| 3 years | 63 days | AED 25,200 |
| 5 years | 105 days | AED 42,000 |
| 7 years | 165 days | AED 66,000 |
| 10 years | 255 days | AED 102,000 |
The examples use a daily wage of AED 400, which is AED 12,000 divided by 30. Part years are paid in proportion to the time worked.
Worked Example: Seven Years of Service
An employee earns a basic salary of AED 12,000 a month and leaves after seven years.
- Daily basic wage: AED 12,000 ÷ 30 = AED 400.
- First five years: 5 × 21 days = 105 days.
- Years six and seven: 2 × 30 days = 60 days.
- Total: 165 days × AED 400 = AED 66,000.
- Cap check: two years of basic salary is AED 288,000, so no cap applies.
Gratuity Rules UAE Employers Must Follow
Minimum service
Gratuity applies after one year of continuous service. Employees with less service receive none.
Basic salary only
The calculation uses the last basic wage. Allowances such as housing, transport and phone are not included.
Unpaid leave is excluded
Days of unpaid leave and absence without pay are not counted in the period of service.
The two-year cap
The total gratuity cannot exceed two years of wages. This matters for staff with long service.
Part-time staff
Part-time employees earn gratuity in proportion to their contracted hours. Half of full-time hours gives half of the full-time amount.
Resignation and termination
Under the 2021 law, the gratuity formula is the same whether the employee resigns or the employer ends the contract. Employers cannot withhold gratuity because of a dispute or resignation.
Payment deadline and deductions
Dues must be paid within 14 days of the contract ending. Employers may deduct amounts the employee legally owes, such as an unpaid loan.
Gratuity Rules by Employee Type
| Employee type | What applies |
|---|---|
| Expat on the mainland or in a free zone outside DIFC and ADGM | Federal gratuity rules on this page |
| UAE national | Usually covered by pension contributions instead of gratuity |
| GCC national | Covered by their home country’s pension rules under GCC arrangements |
| DIFC employee | DIFC Employment Law and its own end-of-service scheme |
| ADGM employee | ADGM Employment Regulations |
| Employer in the optional savings scheme | Monthly contributions to an approved fund can replace gratuity |
The optional end-of-service savings scheme was approved in 2023. Employers who join pay monthly contributions into an approved investment fund instead of a lump sum.
How to Budget for Gratuity as an Employer
Gratuity builds up every month an employee works for you. Accrue it monthly so the cost does not arrive as a surprise.
- For years one to five, accrue about 5.83% of monthly basic salary each month. This is 21 days’ pay spread over 12 months.
- From year six, accrue about 8.33% of monthly basic salary each month. This is 30 days’ pay spread over 12 months.
- Recalculate when basic salary changes, because gratuity uses the last basic wage.
- Include gratuity when you compare the cost of local and remote hires.
Remote engineers placed through staff augmentation are not on your UAE payroll, so UAE gratuity does not apply to them. Need staff in the UAE without your own entity? Our Employer of Record service employs them for you. It costs AED 899 per employee per month, plus government costs at actual cost. Compare all three routes with the hiring cost calculator.
Hiring in Saudi Arabia too? Use our Saudi end of service calculator and read the Emiratisation guide for UAE quota rules. Work out leave pay and unused leave with the UAE leave salary calculator. New to EOR? Read what an Employer of Record does, or browse all hiring guides. See also the UAE labour law guide for employers and the UAE overtime calculator.
UAE Gratuity FAQs
How is gratuity calculated in the UAE?
Gratuity is 21 days of basic salary for each of the first five years of service and 30 days for each year after that. A daily wage of basic salary divided by 30 is commonly used. The total cannot exceed two years of basic salary.
Is gratuity paid on basic or gross salary?
Gratuity is paid on the last basic salary. Housing, transport and other allowances are left out unless the contract includes them in the basic wage.
Do I get gratuity if I resign in the UAE?
Yes, if you have at least one year of continuous service. Under Federal Decree-Law No. 33 of 2021, the gratuity does not depend on who ends the contract.
Is gratuity paid for less than one year of service?
No. An employee needs at least one year of continuous service. After that, part years are paid in proportion to the time worked.
Does unpaid leave reduce gratuity?
Yes. Days of unpaid leave and unpaid absence are not counted as service, so they lower the total.
When must the employer pay gratuity?
The employer must pay wages and end-of-service dues within 14 days of the contract ending.
Do UAE nationals receive gratuity?
UAE nationals in the private sector are usually covered by the pension system instead. Ask the relevant pension authority how this applies to the employee.
Does this calculator apply in DIFC or ADGM?
No. DIFC and ADGM have their own employment laws and end-of-service rules. This calculator follows the federal law used on the mainland and in other free zones.