UAE Gratuity Calculator – How to Calculate End-of-Service Benefits in 2025

The UAE Gratuity Calculator is one of the most searched tools by employees working in the Emirates. Whether you’re leaving your job, completing your contract, or planning future savings, knowing your gratuity rights is essential. This article explains how gratuity works in the UAE, the latest labor law updates, calculation formulas, and how to use an online gratuity calculator effectively.

What Is End-of-Service Gratuity in the UAE?

Gratuity is a mandatory end-of-service benefit given to employees when they finish their employment contract. It acts as a financial reward for years of service and is regulated by UAE Labour Law – Federal Decree-Law No. 33 of 2021.

The amount depends on:

The employee’s last drawn basic salary
Years of service
Contract type (limited or unlimited)

Why the UAE Gratuity Calculator Is Important

Instead of manually applying formulas, employees and HR professionals use a UAE gratuity calculator online for quick, error-free results.

Benefits of using a calculator:

Saves time and ensures accuracy
Helps employees know their legal entitlements
Useful for financial planning before resignation or contract termination
Ensures transparency between employer and employee

UAE Gratuity Calculation Rules (2025 Update)

Here are the key points under the current UAE labour law:

Eligibility
- Minimum of 1 year of service required to receive gratuity.
- No gratuity for service less than one year.
Salary Considered
- Only basic salary is used (housing, transportation, and allowances are excluded).
Service Duration Impact
- Gratuity increases with the number of years worked.
Maximum Limit
- Total gratuity cannot exceed two years’ salary.

UAE Gratuity Calculator Formula

The UAE Labour Law sets different formulas for service up to 5 years and beyond.

Less than 5 years of service:
$(Basic Salary ÷ 30) × 21 × Years of Service$
More than 5 years of service:
$(Basic Salary ÷ 30) × 21 × 5$ + $(Basic Salary ÷ 30) × 30 × (Years of Service – 5)$

Example: How to Calculate UAE Gratuity

Case Study

Basic Salary = AED 8,000
Service Duration = 6 years

Step 1: First 5 years
$(8,000 ÷ 30) × 21 × 5 = AED 28,000$

Step 2: Additional 1 year
$(8,000 ÷ 30) × 30 × 1 = AED 8,000$

✅ Total Gratuity = AED 36,000

UAE Gratuity Calculator for Different Employment Types

Full-time Employees: Calculated on full basic salary.
Part-time Workers: Calculated pro-rata based on hours worked.
Domestic Workers: Covered under a separate domestic workers’ law, but gratuity still applies.
Free Zone Employees: Certain free zones like DIFC and ADGM have their own gratuity or pension schemes.

Resignation and Gratuity: What to Know

Employees who resign after 1 year of service are entitled to gratuity.
Under the new UAE Labour Law, deductions for resignation before completing 5 years are no longer applied (previously, there were reductions).
Employees leaving before completing one year do not qualify.

Best Online UAE Gratuity Calculators

You can calculate your gratuity manually or use online tools:

MOHRE (Ministry of Human Resources and Emiratisation) official portal
HR software calculators provided by employers
Third-party gratuity calculator websites and apps

FAQs on UAE Gratuity

1. What is the minimum service required to get gratuity in the UAE?
At least 1 year of continuous service.

2. Is gratuity calculated on gross salary or basic salary?
Only on basic salary.

3. Do free zone employees get gratuity?
Yes, but some free zones have their own schemes.

4. Can gratuity be withheld by an employer?
Only if the employee has legal liabilities, otherwise gratuity must be paid.

5. Is gratuity taxable in the UAE?
No, gratuity is completely tax-free.

Final Words

The UAE Gratuity Calculator is a vital tool for employees to ensure they receive their rightful end-of-service benefits. Whether you work in the private sector, a free zone, or as a domestic worker, knowing the gratuity formula under UAE labour law helps you plan your financial future confidently.

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