How to use the calculator
- Choose who the gratuity is for. The formula applies to expatriate employees; UAE nationals receive end-of-service benefits under the pensions law.
- Enter the last monthly basic wage, without allowances, and the first and last days of work. Add any days of unpaid absence.
- For a part-time contract, enter the contract hours and the full-time hours a week.
- Keep the 30-day month for a day's wage, or switch to the 365-day year to compare.
How the gratuity is calculated
Years of service = (days from the first to the last day of work − unpaid absence days) ÷ 365
Days of wage = 21 × years up to 5 + 30 × years after 5
A day's basic wage = monthly basic wage ÷ 30
Gratuity = the lower of (days of wage × a day's basic wage) and (24 × monthly basic wage)
Part time: gratuity × contract hours ÷ full-time hours
The calculator counts both the first and the last day of work. It turns days into years on a 365-day year, so part years count in proportion, as the law requires once the first full year is complete.
Gratuity rate per year of service
21 days a year (years 1-5); 30 days a year (after year 5)
The gratuity is 21 days' basic wage for each of the first 5 years of service and 30 days' basic wage for each year after the first 5 years.
- Applies to
- Expatriate full-time workers in the private sector with at least 1 year of continuous service
- Source
- End of service benefits for workers in the private sector (updated 15 Oct 2026), The Official Portal of the UAE Government (u.ae)
- Checked
The limits in the law
| Rule | What the law sets |
|---|---|
| Minimum service before any gratuity is due | At least 1 year of continuous service |
| Wage the gratuity is based on, and the cap | Last basic wage; capped at 2 years' wage |
| Part-time and other work patterns | Pro rata by annual hours |
| How the Labour Law counts years and months | Year = 365 days; month = 30 days |
Sources: End of service benefits for workers in the private sector (updated 15 Oct 2026), The Official Portal of the UAE Government (u.ae); Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationships (English translation, not official), Article 67, The Official Portal of the UAE Government (u.ae). Checked .
The service must be continuous, with the same employer or its legal successor. The calculator counts a year as 365 days of service, including in a leap year.
Worked example
Worked example
Basic wage of AED 10,000 and 7 years of service
The wage and the length of service are illustrations: 2,555 days of full-time service with no unpaid absence.
- A day's basic wage: 10,000 ÷ 30 = AED 333.33.
- First 5 years: 5 × 21 = 105 days of wage.
- The other 2 years: 2 × 30 = 60 days of wage.
- Total: 165 days × AED 333.33 = AED 55,000.00.
- The cap is 24 × 10,000 = AED 240,000.00, so it does not apply.
Gratuity: AED 55,000.00.
With the 365-day year instead, a day's wage is AED 328.77 and the same service gives AED 54,246.58. The gap is the reason the calculator shows the divisor it uses.
Assumptions and what the calculator leaves out
- The day's wage. The law sets the gratuity in days of wage but does not say how to derive a day's wage from a monthly one. The calculator uses the 30-day month of Article 67 and lets you switch to a 365-day year.
- The cap. Article 51 limits the gratuity to 2 years' wage, while the gratuity itself is calculated on the basic wage. The calculator applies the cap to 24 months of the basic wage. The Labour Law's definition of wage adds allowances to the basic wage, so if the cap is read on that wage it is higher; the difference only matters after 25.5 years of service.
- Service before 2 February 2022. The current Labour Law came into force on that date. For contracts of undefined term made under the old law, Article 68 lets the employer calculate the gratuity under the old law's rules; the calculator shows a note when the start date is earlier and applies the current law only.
- Deductions. The employer may deduct amounts the employee owes it under the law or a court judgment. The calculator shows the gross figure.
- Payment. The employer must pay the gratuity with the other final dues within 14 days of the end of the contract. Notice pay and unused leave are separate; see the leave salary calculator.
- Who it covers. Private-sector employees under the federal Labour Law. DIFC and ADGM have their own employment laws, and government employers follow their own rules.
Contracts of undefined term made under the old law
Old-law gratuity rules may apply to undefined-term contracts
The 2021 Labour Law applies to employment contracts of undefined term made under Federal Law No. 8 of 1980; employers had to convert them to fixed-term contracts within one year of the law coming into force (the Minister may extend this), and, subject to that, an employer may calculate end-of-service benefits under the old law's provisions for undefined-term contracts.
- Applies to
- Private-sector employment contracts of undefined term concluded under Federal Law No. 8 of 1980
- Source
- Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationships (English translation, not official), Article 68, The Official Portal of the UAE Government (u.ae)
- Checked
The savings scheme
An employer can join a voluntary savings scheme approved by the Ministry of Human Resources and Emiratisation instead of paying the traditional gratuity for the staff it enrols. Gratuity built up before enrolment is still calculated under the law, so this calculator covers that part.
Savings scheme contributions
5.83% (under 5 years) / 8.33% (over 5 years) of basic salary
Under MOHRE's voluntary alternative end-of-service system (the Savings Scheme), a participating employer pays into an approved investment fund 5.83% of a full-time employee's monthly basic salary if the employee has under 5 years of service and 8.33% after 5 years, within 15 days of the start of each month; the employee receives the contributions and returns within 14 days of the end of employment.
- Applies to
- Private-sector and free-zone employers who opt in, for the employees they enrol
- Source
- End of service benefits for workers in the private sector (updated 15 Oct 2026), The Official Portal of the UAE Government (u.ae)
- Checked
More on the rules in the end-of-service gratuity guide. For income after a job loss, see the ILOE insurance calculator.