UAE Gratuity Calculator 2026

What is Gratuity in the UAE?

Gratuity is an end of service benefit that an eligible employee receives when employment ends. It recognises time spent working for an employer and can form an important part of a final settlement. Many workers use this payment to support a job change, a move home or longer term savings. Knowing the basic method helps you review an estimate before discussing the final amount with your employer.

This UAE Gratuity Calculator 2026 uses your monthly basic salary and years of service to show an estimate in AED. It also shows the number of gratuity days and each calculation step. You can compare the contract and leaving reason options without signing up. Your salary is calculated in your browser and is not sent to a calculation service. Share your result only if you are comfortable sharing that financial information.

New UAE Labour Law 2024 Rules: What to Know in 2026

The main federal private-sector employment framework is Federal Decree-Law No. 33 of 2021, effective from February 2022, with later amendments. The phrase “new UAE Labour Law 2024” is often used in searches, but it should not be understood as a separate gratuity formula applying to every worker. The applicable rules depend on your employment category, jurisdiction and any approved alternative benefits scheme.

For eligible foreign full-time employees under the standard federal rules, at least one year of continuous service is generally required. The basic method is 21 days of basic wage per year for the first five years, then 30 days per year for additional service. Eligible fractions of a year are normally counted proportionally after the first year. Unpaid absence can affect the service period used in the final calculation.

Important distinction: the one-third and two-thirds resignation reductions associated with old unlimited contracts are legacy rules, not the general current federal rule. This tool includes those reductions because they are part of its stated calculation method. Current federal employment contracts use a fixed-term framework. Do not interpret the contract options here as confirmation that an old unlimited-contract rule applies to your employment today.

The standard statutory benefit is also generally subject to a two-year wage cap. This tool follows its displayed formulas without that cap, which matters for longer service periods. Separate systems can apply in the DIFC, ADGM, government employment or domestic work. UAE nationals may be covered by pension arrangements. Check your circumstances with HR, MOHRE or a qualified adviser before relying on an estimate.

How to Calculate UAE Gratuity

Start with your last monthly basic salary, not your total package. Housing, transport and other allowances are normally excluded from this standard calculation. Divide the monthly basic salary by 30 to find the daily basic wage. Then multiply by the eligible gratuity days. Enter only the service period relevant to your employer and check whether unpaid absences need to be excluded.

For less than one year, this tool returns zero. From one through five years, it uses daily basic wage × 21 × years. Above five years, it adds daily basic wage × 21 × 5 to daily basic wage × 30 × the remaining years. With Unlimited Contract and Resignation by Employee selected, it applies one-third from one through three years, two-thirds above three through five years, and the full amount above five years.

Example 1: Three years with no resignation reduction

An employee has a basic salary of AED 6,000 and three years of eligible service. The daily wage is 6,000 ÷ 30 = AED 200. The first-five-year formula gives 21 × 3 = 63 gratuity days. The estimate is 200 × 63 = AED 12,600. Select Limited Contract, or an employer termination or end-of-contract reason, to see this unreduced result in the tool.

Example 2: Seven years of service

With a monthly basic salary of AED 5,000, the daily wage is 5,000 ÷ 30. The first five years produce 105 days. The next two years produce another 60 days, giving 165 total days. Multiplying the unrounded daily wage by 165 gives AED 27,500. This example shows why service beyond five years is calculated in two parts rather than using 30 days for every year.

Example 3: Legacy unlimited-contract resignation

With AED 6,000 basic salary and four years of service, the unreduced estimate is 200 × 21 × 4 = AED 16,800. Choosing Unlimited Contract and Resignation by Employee applies the requested two-thirds legacy factor. The result becomes AED 11,200, equivalent to 56 payable days from 84 base days. This example illustrates the tool’s legacy option; it is not the general current federal resignation entitlement.

Gratuity for Limited vs Unlimited Contracts

In this calculator, Limited Contract always uses the full base formula regardless of the selected leaving reason. Unlimited Contract uses the same formula for termination by the employer and the end of a contract. Only employee resignation under the Unlimited option triggers the legacy service-length reductions. Exactly three years uses one-third; exactly five years uses two-thirds; service above five years receives the full calculated amount.

The distinction helps explain older examples and historical calculations, but it does not determine your legal entitlement on its own. For a current settlement, confirm the governing law, your actual employment dates, the final basic salary and whether an alternative savings scheme covers part of your service. Keep your contract and salary records available when reviewing the employer’s figures.

How to Use Your Estimate

Enter a positive monthly basic salary and your completed years of service, including decimals where needed. For six extra months, add 0.5 to the full years. Choose the contract option and leaving reason, then press Calculate Gratuity. Results also update as valid inputs change. The breakdown separates base days, the reduction factor and payable days so you can see why the amount changes.

The estimate covers gratuity only. A final settlement may also include salary owed, unused leave, notice compensation or lawful deductions. Ask for these items separately rather than comparing the entire settlement with the gratuity figure. Use the WhatsApp button to share the displayed estimate and assumptions when discussing the calculation, and verify the final legal entitlement before making financial commitments.

Frequently Asked Questions

Who qualifies for UAE gratuity?

Under the standard federal private-sector rules, an eligible foreign full-time worker generally needs at least one year of continuous service. Different rules can apply to other employment categories and jurisdictions.

Is gratuity based on basic salary or total salary?

The standard calculation uses the last basic salary, excluding allowances such as housing and transport. Enter the basic monthly salary shown in your contract.

How are partial years calculated?

After completing one year of eligible service, partial years are calculated proportionally. For example, three years and six months can be entered as 3.5 years.

Does resignation reduce gratuity under current UAE law?

The old unlimited-contract resignation reductions are not the general rule under the current federal framework. This calculator applies the requested legacy reductions when Unlimited Contract and Resignation by Employee are selected.

What is the maximum gratuity under standard federal rules?

The standard statutory gratuity is generally capped at two years of wages. This calculator follows the displayed formulas without applying that cap, so long-service estimates need checking.

Does this calculator include my entire final settlement?

No. It estimates gratuity only. Unpaid salary, unused leave, notice pay, deductions and alternative savings schemes are outside this calculation.