UAE Gratuity Calculator
This UAE gratuity calculator works out your end of service gratuity exactly as Article 51 of the UAE Labour Law sets it out: 21 days of basic wage for each of the first five years of service and 30 days for every year after, on your last basic wage — with part years paid pro-rata, the two-year cap applied, and your full gratuity paid even if you resign.
- First 5 years
- 21 days’ wage per year
- After 5 years
- 30 days’ wage per year
- Wage basis
- Last basic wage only
- Resigning
- Full gratuity
- Maximum cap
- Two years’ wage
Work in the DIFC or ADGM? Those two free zones have their own end of service systems and this calculator does not apply — see the note in Method below.
Your job and salary
Housing, transport and other allowances combined. UAE gratuity is calculated on your basic wage only (Article 51), so allowances do not raise the gratuity itself — they are used here only for the statutory two-year cap, which the law expresses on your total wage, and to show the comparison below.
Service runs from the joining date to the last working day, counting the last day itself. Part years are paid pro-rata once you have completed one full year.
Article 51(4): days of absence without pay are not counted in your service, so they are deducted here. Paid leave counts as service as normal.
Basic wage (the law) vs total wage (a common expectation)
How this UAE gratuity calculator works — your amount, part by part
Your gratuity is built in two bands. Each of the first five years of service earns 21 days of your last basic wage, and every year after the fifth earns 30 days. The two bands are added together, the two-year cap is checked, and a part-time or job-sharing pattern then takes its hours ratio of the result. How the job ended makes no difference to the figure.
The Article 51 formula for end of service gratuity in the UAE
One formula for every foreign private-sector employee. Article 51 of the UAE Labour Law (Federal Decree-Law No. 33 of 2021) pays the gratuity “according to the basic wage”: 21 days of wage for each of the first five years of service and 30 days of wage for each year beyond that, priced throughout at your last basic wage.
The law speaks in days of wage; the daily wage is your monthly basic wage divided by 30 — the standard convention, matching the law’s own rule that a month counts as 30 days (Article 67). In symbols: gratuity = (basic ÷ 30) × (21 × years up to 5, plus 30 × years beyond 5).
| Service period | Gratuity for each year | Formula |
|---|---|---|
| Each of the first 5 years | 21 days of basic wage | 21 × (basic ÷ 30) |
| Each year after the fifth | 30 days of basic wage — a full month | 30 × (basic ÷ 30) |
| Fractions of a year | Paid pro-rata, after the first year is complete | pro-rata |
| Overall maximum | Total gratuity capped at two years of wage | Art. 51(6) |
Only the basic wage counts. The law defines the basic wage as the wage in your employment contract, excluding every allowance and benefit in kind. An employee on AED 10,000 basic with AED 2,500 of housing and transport allowances has a gratuity wage of AED 10,000 — the AED 2,500 never enters the formula. Salary structures that push pay into allowances therefore produce smaller gratuities than the headline salary suggests, and this is the first thing to check in any final settlement offer.
The cap rarely bites. The two-year cap is high relative to the accrual rates: even on the narrower basic-wage measure used by most payroll departments, the formula first reaches it at about 25.5 years of service — 105 days for the first five years, then 30 days a year until the total reaches 720 days. Where the cap does bite, this calculator applies it and shows the reduction in the breakdown above.
Resigning? You keep the full gratuity — the old fractions are gone
Since 2 February 2022, resignation costs you nothing. The current Labour Law grants the Article 51 gratuity on completion of one year of continuous service and contains no reduction, fraction or forfeiture based on who ended the contract. Resigning, reaching the end of a fixed term, being terminated, and even dismissal for cause under Article 44 all pay the identical figure. Many older calculators and HR pages still subtract a third or two thirds when you resign — that scale comes from Article 137 of the old Federal Law No. 8 of 1980, which was repealed when the current law took effect.
One legacy exception survives. Under the transitional rule in Article 68(3), an employer with an unconverted pre-2022 indefinite-term contract may elect to calculate the gratuity on the old law’s basis, where the old resignation scale could still apply. That election belongs to the employer, almost all legacy contracts were required to be converted to fixed-term by February 2023, and it cannot arise on a contract concluded or converted under the current system — so this calculator follows the current law, and the exception is flagged here rather than built into the figures.
Two separate amounts are not gratuity. If your employer terminates you because you filed a serious complaint with MOHRE, or a case against the employer that was proven, Article 47 lets a court award compensation of up to three months of total wage — paid in addition to your gratuity and notice allowance, never instead of them. And resigning without serving your notice period can create a notice-compensation liability under Article 43; that is a separate settlement item, not a deduction the law makes from your gratuity.
The Savings Scheme — the voluntary alternative to this lump sum
Since late 2023, an employer may choose to enrol employees in the Voluntary Alternative End-of-Service Benefits Scheme (Cabinet Resolution No. 96 of 2023) instead of accruing the Article 51 lump sum. Under the scheme the employer pays a monthly subscription into an approved investment fund: 5.83% of your monthly basic wage while your total service is five years or less, and 8.33% once it passes five years — the same accrual rates as the formula above, expressed monthly (21 days a year is 5.83% of a year’s basic wage; 30 days is 8.33%). On leaving, you receive the accumulated contributions plus the fund’s investment returns.
Two things matter if your employer is enrolled. First, enrolment is the employer’s choice, not yours, and it only replaces the gratuity for the period you are enrolled: gratuity for service before enrolment is preserved, calculated on your basic wage at the enrolment date, and remains payable when you leave — the calculator above still prices that earlier period. Second, the enrolled period itself becomes a fund balance that depends on investment returns, so no gratuity formula can compute it; your fund statements are the source for that part.
Worked examples — UAE gratuity in practice
Eight years, employer ends the contract. Fatima’s last basic wage is AED 10,000 a month, so her daily wage is 10,000 ÷ 30 = AED 333.33. First five years: 5 × 21 days = 105 days → AED 35,000. Years 6–8: 3 × 30 days = 90 days → AED 30,000. Total: AED 65,000 — and it would be exactly the same AED 65,000 had she resigned, because the current law makes no distinction.
Six years on a higher basic. Omar’s basic wage is AED 12,000 (daily AED 400). First five years: 105 days → AED 42,000. Year 6: 30 days → AED 12,000. His gratuity is AED 54,000. His AED 4,000 of monthly allowances play no part in the figure at all.
Four and a half years, resigning. Priya earns a basic wage of AED 15,000 (daily AED 500) and resigns after 4 years 6 months. All her service sits in the first band: 4.5 × 21 = 94.5 days × AED 500 = AED 47,250, paid in full. An old-law calculator would wrongly cut this to two thirds — AED 31,500 — using the repealed 1980 scale.
Twelve years, modest basic. Ahmed’s basic wage is AED 6,000 (daily AED 200). First five years: 105 days → AED 21,000. Years 6–12: 7 × 30 = 210 days → AED 42,000. Total AED 63,000, well under the two-year cap, which on his basic wage would only begin to bite at around 25.5 years of service.
How we calculate — method and sources
This gratuity calculator follows the UAE Labour Law step by step:
- Confirm eligibility. A foreign private-sector employee qualifies after one year of continuous service (Article 51(2)). Below one year, no gratuity is payable. UAE nationals are under the GPSSA pension system instead, and domestic workers have their own law — neither is covered here.
- Count the service. Days from the joining date to the last working day, counting the last day, minus any days of unpaid absence (Article 51(4)); the total is expressed in years on the law’s 365-day year (Article 67). Part years are paid pro-rata (Article 51(3)).
- Apply Article 51. Daily wage = last monthly basic wage ÷ 30 (the standard convention; the law fixes a month at 30 days in Article 67 but does not print the divisor in Article 51). Gratuity = daily wage × (21 × the first five years, plus 30 × every year beyond five). Allowances never enter the formula.
- Apply the cap. The total may not exceed two years of wage (Article 51(6)). The statute expresses the cap on “wage”, which the law defines as basic plus allowances, so this calculator caps at 24 × your total monthly wage when you enter allowances, and at 24 × basic wage when you do not. Most payroll practice applies 24 × basic wage; the two measures only diverge beyond roughly 25 years of service, and the calculator shows you when the cap has reduced your amount.
- Apply the work pattern. Full-time pays the full figure. Part-time and job-sharing pay the full-time figure multiplied by your hours ratio (Article 30, Executive Regulation). Temporary-model engagements earn no end of service pay under that article.
- Settlement timing. Under Article 53 the employer must pay your wages and all entitlements, gratuity included, within 14 days of the contract ending.
The formula, eligibility rules, resignation position and cap are taken from Federal Decree-Law No. 33 of 2021 — Articles 1, 43, 44, 47, 51, 52, 53, 67 and 68 — as published in the consolidated text on the UAE Legislation platform, and cross-checked against the UAE Government Portal’s end of service summary.
The part-time mechanism is Article 30 of Cabinet Resolution No. 1 of 2022, and the Savings Scheme is Cabinet Resolution No. 96 of 2023. Figures were verified on 23 October 2026. The DIFC and ADGM free zones are outside the federal law: the DIFC replaced gratuity with mandatory workplace-savings contributions (DEWS) in February 2020, and the ADGM applies its own Employment Regulations with a different daily-rate rule — if you work in either zone, this calculator does not apply to you.
UAE gratuity calculator — common questions
How is gratuity calculated in the UAE?
Under Article 51 of the UAE Labour Law, a foreign private-sector employee with at least one year of continuous service earns 21 days of basic wage for each of the first five years and 30 days for each year after, priced at the last basic wage. The daily wage is the monthly basic wage divided by 30, part years are paid pro-rata, unpaid absence days are excluded, and the total cannot exceed two years of wage.
Is UAE gratuity calculated on basic salary or full salary?
On basic salary only. Article 51 works the gratuity out on the basic wage, which the law defines as the wage in your employment contract excluding all allowances and benefits in kind. Housing, transport and other allowances do not count toward gratuity in the UAE, however large they are.
Do I get my full gratuity if I resign in the UAE?
Yes. Since 2 February 2022, when the current Labour Law took effect, resignation does not reduce your gratuity at all: an employee who resigns after at least one year of service receives exactly the same Article 51 amount as one whose contract the employer ends. The old one-third and two-thirds resignation scale belonged to the repealed 1980 law and no longer applies to current contracts.
What is the maximum end of service gratuity in the UAE?
Article 51(6) caps the total gratuity at two years of wage. On the basic-wage measure most payroll practice uses, the formula first reaches the cap at about 25.5 years of service, so the cap only affects very long service. Our calculator applies the cap and shows you if it has reduced your figure.
When must my employer pay my gratuity in the UAE?
Within 14 days of the end of the contract. Article 53 of the Labour Law requires the employer to pay your wages and all other entitlements, including the end of service gratuity, within fourteen days of the contract ending.
How much gratuity do I get for less than one year, or part-time work?
Less than one year of continuous service earns no gratuity at all. Part-time and job-sharing employees are paid pro-rata under Article 30 of the Executive Regulation: your full-time gratuity multiplied by your contracted annual hours divided by the full-time annual hours for the same job. Temporary-model engagements earn no end of service pay.
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