Gratuity Calculator (UAE)

Federal Decree-Law No. 33 of 2021 — the labour law in force since 2 February 2022 — sets end-of-service benefits for full-time foreign workers in two tiers: "a wage of twenty one days for each year of the first five years of service" and "thirty days for each year exceeding such period", calculated on the last basic wage. Basic means basic: housing, transport and other allowances are excluded by the law's own definition of basic wage. The daily rate convention is basic salary ÷ 30 (the statute is silent on the divisor; ÷30 is the MOHRE and market convention, and the one this calculator uses — stated rather than assumed, because ADGM's separate regime legislates ÷365 and the difference is real money).

Service counts from one completed year: below that, no gratuity; above it, parts of a year count proportionally, and unpaid absence days are excluded from the service term by Article 51(4). On an AED 10,000 basic salary each of the first five years is worth exactly AED 7,000 and each year after AED 10,000 — so 3 years 6 months pays AED 24,500, and 7 years pays AED 55,000. The statutory ceiling is two years' wage — the law says wage, not basic wage, a distinction most pages flatten — and with gratuity accruing on basic while the cap references total pay, it only starts binding after roughly 26 years of service.

Under the repealed 1980 law, an employee on an unlimited contract who resigned received one-third of the gratuity after one to three years' service and two-thirds after three to five. That regime is dead: the 2021 law abolished unlimited contracts entirely, and Article 51 draws no distinction based on which party ends the employment or why. Even summary dismissal no longer forfeits the benefit — the law's maximum disciplinary penalty is expressly "termination of service while preserving the worker's right of end of service benefits".

This matters because the top-ranking gratuity calculators still apply the old cuts. On the 3-years-6-months example, a stale calculator shows AED 16,333 for a resignation instead of the correct AED 24,500 — an AED 8,167 error that could anchor a real negotiation. This page's ending-type selector exists to make the point visibly: pick resignation or termination and watch the number not change, because that is what the law says. The one historical wrinkle: service periods that straddle 2 February 2022 could, during the transition, have their pre-2022 portion computed under old-law contract terms — relevant to long-tenured employees, and worth a professional's eyes if that's you.

The scope is the mainland UAE private sector and ordinary free zones (JAFZA, DMCC and similar), where Federal Decree-Law 33/2021 applies. Two financial free zones run their own systems and a 21/30-day calculator is simply wrong for them: DIFC abolished gratuity accrual in February 2020 in favour of DEWS, a funded scheme where employers contribute 5.83% of basic monthly (8.33% after five years' service); ADGM kept gratuity but on its own math — its 2024 regulations use a daily rate of annual basic ÷ 365, mandate that basic be at least half of total wages, and carry no two-years cap. UAE and GCC nationals receive pensions through GPSSA rather than gratuity, and domestic workers fall under a separate law.

One more modern wrinkle: since late 2023, employers can opt into the voluntary alternative end-of-service savings scheme (Cabinet Resolution 96 of 2023), paying 5.83–8.33% of basic monthly into licensed investment funds instead of accruing gratuity. If your employer enrolled you, your benefit is the fund balance — this calculator then describes what you accrued before enrolment, which the law requires to be computed at your basic salary as of the switch.

Timing is statutory: Article 53 requires the employer to pay wages and all entitlements — gratuity included — within 14 days of the contract's end date. Deductions from the payout are limited to grounds the executive regulations enumerate: recovering loans or overpayments, court-ordered amounts, approved disciplinary fines, and the cost of damage the employee caused to company property — not a general right to withhold.

The inputs that move the number in practice: your last basic salary (check your contract's split between basic and allowances — a heavily allowance-loaded package accrues less gratuity, which is why the split matters at offer time, not just at exit); your exact service dates (the calculator's years-and-months entry approximates what MOHRE computes from dates); and unpaid leave, which subtracts from the service term. This page is a planning tool built on the decree's text with the articles cited — for a dispute, MOHRE's own channels and a UAE employment lawyer are the authority.