UAE Gratuity Calculator 2025 | Latest MOHRE Updates Included

Gratuity (مكافأة نهاية الخدمة) is a mandatory end-of-service benefit that employers in UAE must pay to employees who complete at least one year of continuous service. This payment serves as financial recognition for your dedication and hard work. The amount depends on three key factors:

• Your basic salary (excluding allowances)
• Total years of service
• Type of employment contract (limited or unlimited)

What is a Gratuity Calculator?

A gratuity calculator is an online tool that helps employees in the UAE calculate their end-of-service benefits. The calculator uses your basic salary and years of service to determine how much gratuity you will receive when leaving your job.

The UAE labor law has specific rules for gratuity calculations, and using a calculator ensures you get the correct amount.

How Does the UAE Gratuity Calculator Work?

Calculating your gratuity amount is quick and easy with an online gratuity calculator. Here’s a detailed guide on how to use it effectively:

Enter Your Basic Salary

The gratuity amount is calculated based on your basic salary (not your total salary, including allowances). Input your current or last drawn basic salary in the designated field.

Enter Your Years of Service

Next, provide the total number of years you have worked for the company. If your service period includes a fraction of a year (e.g., 5 years and 8 months), you can either round it off or enter the exact duration, depending on the calculator’s functionality.

Click the Calculate Button

Once you’ve entered the required details, simply click the “Calculate” button. The gratuity calculator will process the information using the standard gratuity formula and display your eligible gratuity amount instantly.

Example of Gratuity And Calculation

• Basic Salary: AED 8,000
• Service Duration: 4 years
• Contract Type: Unlimited (Resigned after 3-5 years)

Calculation:

• Daily Wage = (8,000 ÷ 30) = AED 266.67
• Gratuity = (21 days × 4 years × 266.67) × (⅔) = AED 14,933.33

Gratuity Rules Under UAE Labour Law

Gratuity, or end-of-service benefits, is a crucial part of an employee’s rights under UAE labour law. The amount you receive depends on your contract type (limited or unlimited), years of service, and reason for leaving (resignation or termination).

Below is a detailed breakdown of how gratuity is calculated in the UAE.

Gratuity for Limited Contracts

If you are on a fixed-term (limited) contract, your gratuity is calculated as follows:

• 1 to 5 years of service:
  • 21 days’ basic salary for each year worked.
• More than 5 years of service:
  • First 5 years: 21 days’ basic salary per year.
  • After 5 years: 30 days’ basic salary per year.

Example

If your basic salary is AED 10,000 and you worked for 6 years:

• First 5 years = 5 × (21/30 × 10,000) = AED 35,000
• 6th year = 1 × (30/30 × 10,000) = AED 10,000
• Total Gratuity = AED 45,000

Gratuity for Unlimited Contracts

For employees on open-ended (unlimited) contracts, gratuity depends on how long you worked and whether you resigned or were terminated.

A. If You Resign:

• Before completing 1 year: No gratuity.
• 1 to 3 years of service: ⅓ of 21 days’ salary per year.
• 3 to 5 years of service: ⅔ of 21 days’ salary per year.
• 5+ years of service:
  • First 5 years: Full 21 days’ salary per year.
  • After 5 years: 30 days’ salary per year.

B. If You Are Terminated (Employer Ends Contract):

• After 1+ years of service, you receive full gratuity without reductions.

Example

If your basic salary is AED 10,000, and you resign after 4 years:

• First 3 years = 3 × (⅓ × 21/30 × 10,000) = AED 7,000
• 4th year = 1 × (⅔ × 21/30 × 10,000) = AED 4,666
• Total Gratuity = AED 11,666

Complete Gratuity Eligibility Rules

Who Qualifies for Gratuity in the UAE?

Gratuity (end-of-service benefits) is a legal right for employees working in the UAE, but certain conditions apply:

Eligible Employees:

• All expatriate workers (private & government sectors)
• Full-time employees only (part-time workers excluded)
• Minimum 1 year of continuous service required
• This applies to both limited (fixed-term) & unlimited contracts

When Can Gratuity Be Denied?

Under Article 139 of UAE Labor Law, employers may legally withhold gratuity if:

1. Resignation Without Proper Notice
   ○ Employee quits without serving the full notice period (typically 30-90 days)
   ○ Example: Leaving abruptly without a handover
2. Termination for Gross Misconduct
   ○ Theft, fraud, or workplace violence
   ○ Major violation of company policies
   ○ Falsifying documents or breach of trust
3. Failure to Complete 1 Year of Service
   ○ Employees who leave before 12 months get no gratuity
   ○ Exception: If terminated unfairly (the employee may claim via labor court)
4. Contract Violations
   ○ Joining a competitor without approval (if restricted in the contract)
   ○ Sharing confidential company data

How to Secure Your Gratuity in the UAE

Gratuity is your legal right after completing at least one year of continuous service in the UAE. To ensure you receive your full end-of-service benefits, follow these key steps:

Understand Your Employment Contract

Review your contract before signing to know your gratuity terms.
Check if you’re on a limited or unlimited contract, as rules differ.

Know Your Rights Under UAE Labour Law

Minimum 1 year of service required (except in cases of termination for misconduct).
Gratuity is based on basic salary, not allowances.
Resignation vs. Termination affects the amount (full vs. reduced gratuity).

Maintain Proper Employment Records

Keep copies of:

• Employment contract
• Salary slips (to prove basic salary)
• Official resignation/termination letters

Request Gratuity Upon Leaving

Formally ask HR for your gratuity calculation.
If unpaid, send a written reminder (keep proof).

Resolve Disputes Legally

Contact MOHRE (Ministry of Human Resources) for mediation.
If unresolved, file a case in labor court (lawyers can help).

Special Cases and Exceptions

Public Sector Employees

• Different calculation method
• Typically more generous benefits
• Includes additional allowances

Free Zone Employees

• Subject to specific free zone regulations
• Some zones have modified calculation methods
• Always check your free zone’s labor rules

Early Termination Penalties

• Limited contracts: May face visa ban if broken early
• Unlimited contracts: Standard notice period applies

How to Claim Your Gratuity Payment

Required Documents

1. Original employment contract
2. Salary certificates/payslips
3. Passport and visa copies
4. Company termination/resignation letter
5. Bank details for the transfer

Claim Process Timeline

1. Day 1-7: Submit all documents to HR
2. Day 7-14: Employer verifies and calculates the amount
3. Day 14-30: Payment processed (may vary by company)

Frequently Asked Questions

Conclusion

In this article, I have explained how you can use the Gratuity Calculator. I hope you found this article helpful. If you liked it, you can write ‘good’ in the comments.

If anything is missing or incorrect in the article, you can also let us know in the comment box so we can quickly correct our mistakes and provide you with accurate information. To learn more about these calculators, you can also visit our website.

Calculating gratuity correctly ensures you receive the right amount when leaving your job. The Online Gratuity Calculator UAE makes this process easy and accurate.

Whether you are resigning or completing your contract, always check your gratuity amount using a trusted calculator. This way, you can avoid mistakes and claim your full benefits under UAE law.