Calculate your end-of-service gratuity under UAE Federal Decree-Law No. 33 of 2021. Resignations now receive full gratuity (the old reduction rule was abolished).
🧾 UAE End-of-Service Gratuity
How UAE gratuity is actually calculated
The formula is simpler than most people expect, and the arguments almost always come from one of its inputs rather than the arithmetic. Your entitlement accrues at 21 days of basic pay for each of the first five years, then 30 days for every year after that. A day is your basic monthly salary divided by 30. The total is capped at two years’ basic pay, however long you have served.
Two thresholds matter. Below one year of continuous service there is no gratuity at all. And since Federal Decree-Law No. 33 of 2021, resigning no longer reduces what you are owed — the old sliding scale that cut a resigning employee’s entitlement to a third or two-thirds has been abolished. If someone tells you that you forfeit part of your gratuity by resigning, they are working from the pre-2021 rules.
The input that causes most disputes: basic salary
Gratuity is calculated on basic salary only. Housing, transport, phone and any other allowance is excluded by law. This is why two people on the same total package can walk away with very different amounts — the one whose contract loads more of the package into allowances receives less.
Take the figure from your contract, not your payslip total and not your offer letter’s headline number. If your package is AED 12,000 made up of AED 7,000 basic plus AED 5,000 allowances, the calculator wants 7,000. Entering 12,000 will overstate your gratuity by more than 70%, and it is the single most common reason people feel short-changed on their final settlement.
A worked example
Say your basic is AED 8,000 and you have served seven years. Your daily rate is 8,000 ÷ 30 = AED 266.67. The first five years earn 5 × 21 = 105 days. The remaining two years earn 2 × 30 = 60 days. That is 165 days in total, or roughly AED 44,000. The two-year cap would only bite at AED 192,000, so it does not apply here.
Notice how much the sixth and seventh years are worth compared with the first five — 30 days each against 21. Gratuity accelerates with tenure, which is worth knowing if you are weighing a move shortly before a service anniversary.
What this calculator does not cover
- Unpaid leave does not count toward continuous service, so long unpaid absences reduce the years figure you should enter
- Unlimited vs limited contracts no longer changes the gratuity formula under the 2021 law, though it still affects notice and early-termination terms
- Free zone and DIFC/ADGM employers may run their own employment regimes with different rules
- Dismissal for gross misconduct under the circumstances set out in the law can forfeit gratuity entirely
- Deductions your employer is entitled to make, such as outstanding loans, come off the final figure
Treat the result as what you should expect to see, not a legal determination. If your final settlement comes in materially below it, ask for the calculation in writing — employers can and do make errors, and most are resolved by pointing at the basic-salary line.
Our full guide to end-of-service gratuity in the UAE covers the claim process and what to do if payment is withheld. If you are working in Saudi Arabia instead, the equivalent entitlement sits under different rules — see Saudi labour law for expats.