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UAE Gratuity Calculator: A Simple Guide to Your End-of-Service Benefits

If you work in the United Arab Emirates (UAE), you might be wondering about your end-of-service gratuity—a payment you receive when you leave your job. This guide explains what gratuity is, how to calculate it, and why using a UAE Gratuity Calculator can make things easier. We’ll break it down in simple terms, covering the latest UAE labor laws, formulas, examples, and answers to common questions.

What Is Gratuity in the UAE?

Gratuity is a thank-you payment from your employer when your job ends, whether you resign, get terminated, or finish a contract. It’s required by the UAE Labour Law (Federal Decree-Law No. 33 of 2021) for private sector employees, whether on unlimited or limited contracts. The amount you get depends on:

How long you’ve worked at the company
Your basic salary (not including allowances, bonuses, or overtime)
The type of contract and reason for leaving

Why Use a Gratuity Calculator?

Calculating gratuity by hand can be confusing, but a UAE Gratuity Calculator makes it simple by:

Giving you a quick and accurate estimate
Avoiding mistakes in calculations
Helping you plan your finances
Ensuring you and your employer are on the same page

Key Rules for UAE Gratuity

Here are the main things to know:

Eligibility: You need to work at least one full year to qualify for gratuity. If you resign before a year, you won’t get it.
Calculation Basis: Gratuity is based only on your basic salary, not extras like housing, transport, or bonuses.
Probation Period: You don’t earn gratuity during your probation period.
Maximum Limit: Your gratuity can’t be more than two years’ worth of your basic salary.

How to Calculate Gratuity in the UAE

The gratuity amount depends on how long you’ve worked:

Less than 5 years: You get 21 days of your basic salary for each year worked.
More than 5 years: You get 21 days’ salary for the first 5 years, plus 30 days’ salary for each additional year.

Formula

Here’s the formula in simple terms:

Gratuity = (Basic Salary ÷ 30) × 21 × Years of Service (for the first 5 years) + (Basic Salary ÷ 30) × 30 × Years beyond 5

Example Calculation

Let’s say your basic salary is AED 10,000, and you’ve worked for 7 years.

Step 1: First 5 Years
(10,000 ÷ 30) × 21 × 5 = AED 35,000

Step 2: Next 2 Years
(10,000 ÷ 30) × 30 × 2 = AED 20,000

Total Gratuity = 35,000 + 20,000 = AED 55,000

Online Gratuity Calculators

You can use free online tools to calculate your gratuity instantly. Some options include:

UAE Ministry of Human Resources & Emiratisation (MOHRE) website
Calculators provided by your employer
Third-party HR websites

These tools usually ask for your:

Joining date
Last working date
Basic salary
Contract type (limited or unlimited)

Gratuity for Different Contract Types

Unlimited Contract: If you resign after at least one year, you’re still entitled to gratuity.
Limited Contract: You get gratuity if you complete the contract term. If you resign early, you might not get the full amount.

Gratuity for Domestic and Free Zone Workers

Domestic Workers: They’re covered by different laws but still get gratuity.
Free Zone Workers: Some free zones, like DIFC or ADGM, have their own rules. Check with your free zone authority.

Recent Changes to UAE Gratuity Law

Since February 2022, the UAE Labour Law has been updated to make things fairer:

If you resign after one year, your gratuity won’t be reduced (in the past, it could be).
Part-time, temporary, or remote workers now qualify for gratuity, but it’s still based on basic salary and years worked.

Common Questions About Gratuity

How is gratuity calculated for part-time workers?
It’s calculated based on your hours compared to a full-time employee.
Is gratuity taxed in the UAE?
No, it’s completely tax-free.
What if my employer doesn’t pay my gratuity?
You can file a complaint with MOHRE or your free zone authority.
Do allowances count toward gratuity?
No, only your basic salary is used.