UAE Gratuity Calculator 2026: Formula, Cap and Examples
How to calculate UAE end-of-service gratuity from your last basic salary, with correct worked examples, the 2-year cap and payment deadline.
In this article
- How do I calculate UAE gratuity?
- What are some worked examples?
- Who qualifies for gratuity?
- Is there a cap on gratuity?
- How do unpaid leave and part-years affect the amount?
- Can the employer deduct from my gratuity?
- Does resignation or termination change gratuity?
- When must gratuity be paid?
- What is the optional end-of-service savings scheme?
- What about DIFC and ADGM?
- Official sources
The UAE gratuity calculator formula is simple: take your last basic salary, divide by 30 for a daily wage, then pay 21 days per year for the first five years and 30 days per year after that. This applies to expatriate private-sector employees under Federal Decree-Law No. 33 of 2021. This guide gives the formula, worked examples you can check yourself, and the rules on cap, unpaid leave, deductions and payment time.
How do I calculate UAE gratuity?
The UAE Government (u.ae) states that gratuity is based on the last basic salary only. Housing, transport and similar allowances are not counted.
- Take your last monthly basic salary from your contract.
- Divide it by 30 to get the daily basic wage.
- For the first 5 years of service, multiply the daily wage by 21 for each year.
- For each year beyond 5, multiply the daily wage by 30.
- Add the two parts. Check the result against the cap (see below).
Formula for service of more than 5 years: (daily wage × 21 × 5) + (daily wage × 30 × years after 5).
What are some worked examples?
| Case | Working | Gratuity |
|---|---|---|
| Basic AED 3,000, 2 years | (3,000 ÷ 30) = 100; 100 × 21 × 2 | AED 4,200 |
| Basic AED 6,000, 2.5 years | (6,000 ÷ 30) = 200; 200 × 21 × 2.5 | AED 10,500 |
| Basic AED 6,000, 8 years | 200 × 21 × 5 = 21,000; 200 × 30 × 3 = 18,000 | AED 39,000 |
| Basic AED 6,000, 26 years | 21,000 + (200 × 30 × 21 = 126,000) = 147,000; cap is 24 × 6,000 = 144,000 | AED 144,000 (capped) |
If your package is AED 10,000 but only AED 6,000 is basic salary, use AED 6,000. This guide is an explanation, not a live calculator.
Who qualifies for gratuity?
Article 51 covers expatriate full-time workers with at least 1 year of continuous service. Under one year, no gratuity is due. Once you pass one year, part-years count in proportion to the time served.
- Part-time and similar work models: the gratuity is pro-rated by contracted annual hours compared with full-time hours (Article 30, Cabinet Resolution No. 1 of 2022).
- Temporary work under one year: no gratuity.
- UAE nationals in the private sector: covered by pension and social-security legislation instead, not this formula.
For how contracts and notice work, see our guide to UAE labour contract basics.
Is there a cap on gratuity?
Yes. The official text says total gratuity cannot exceed the wage of 2 years. Using basic wage, that is 24 times your monthly basic salary. At AED 10,000 basic, the ceiling is AED 240,000.
How do unpaid leave and part-years affect the amount?
Days of unpaid absence are excluded from your period of service. Part-years above the one-year minimum count proportionately, as in the 2.5-year example above. Use your actual start date, end date and leave records rather than rounded years.
Can the employer deduct from my gratuity?
u.ae says the employer may deduct amounts the worker owes. Ask for each deduction to be itemised in writing.
Does resignation or termination change gratuity?
The u.ae page describes gratuity as due on end of service and does not set out a separate reduced rate for resignation. Your employer should show the working in writing if the figure differs from the formula. Confirm your own situation with MOHRE, for example if you are on a fixed-term contract.
When must gratuity be paid?
u.ae says outstanding wages, entitlements and gratuity must be paid within 14 days of the termination of the contract. A final settlement can also include unpaid salary and leave pay, which are separate from gratuity. You can check your permit and employment records in our MOHRE work permit status guide.
What is the optional end-of-service savings scheme?
u.ae describes a voluntary MOHRE savings scheme (Cabinet Resolution No. 96 of 2023) that employers can use instead of the traditional gratuity, in the private sector and free zones. Employer contributions for full-time staff are 5.83% of monthly basic salary for under 5 years of service and 8.33% above 5 years. Employees may add voluntary contributions of up to 25% of total monthly wage. Payout is due within 14 days after employment ends. If your employer enrols you, gratuity accrued before enrolment must be settled. Returns depend on the chosen fund.
What about DIFC and ADGM?
DIFC says its DEWS plan is a defined-contribution end-of-service benefits plan for employees working in DIFC, so the federal formula above should not be assumed there. The DIFC page gives no rates. We could not verify ADGM rules on an official page, so check ADGM directly.
Official sources
Official sources
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