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UAE gratuity calculator

Enter your basic salary and years of service to estimate your end-of-service gratuity under current UAE labour law.

Basic salary only — not housing, transport, or other allowances.

Use a decimal for partial years, e.g. 4 years 6 months = 4.5.

Estimated gratuityAED 0

This calculator uses the formula in Article 51 of Federal Decree-Law No. 33 of 2021, which took effect on 2 February 2022. It replaced the older law that paid unlimited-contract employees less if they resigned before completing 5 years — that reduced-gratuity rule no longer applies to contracts under the current law. If you're still on a legacy unlimited contract signed before the reform, check with HR whether it's been converted.

Gratuity is based on your basic salary, not your total package. That trips a lot of people up — allowances for housing, transport, or a car aren't part of the calculation, only the basic salary line on your contract.

The formula rewards longer service more than proportionally: 21 days' pay per year for the first five years, then 30 days' pay for every year after that. Someone with eight years in gets a noticeably better rate on years six through eight than they did on year one.

There's a cap, too — total gratuity can't exceed two years' worth of salary, no matter how long you've worked. It rarely matters unless you're well past a decade with the same employer.

One edge case worth knowing about: Article 44 lets an employer withhold gratuity entirely in specific gross-misconduct dismissal cases. It's not common, but it's the reason two people with identical salaries and tenure can end up with different payouts.

Frequently asked questions

How is gratuity calculated in the UAE?

21 days of basic salary for each of your first five years of service, then 30 days of basic salary for each year after that. Under one year of service, there's no gratuity at all. The total is capped at two years' total salary.

Does gratuity apply if I resign instead of being terminated?

Under the current law (effective February 2022), yes — resignation and termination are calculated the same way, provided you've completed at least one year and weren't dismissed for the specific misconduct reasons listed in Article 44.

Is gratuity based on basic salary or total salary?

Basic salary only. Housing allowance, transport allowance, and other benefits are excluded from the calculation — a common source of confusion when people estimate their own payout.

Do I pay tax on my gratuity?

No. The UAE doesn't levy personal income tax, so whatever gratuity figure you calculate is what you receive in full.

What happened to the old 'unlimited contract' rules?

They were phased out. Before February 2022, unlimited-contract employees who resigned before five years of service received a reduced gratuity — a third after 1-3 years, two-thirds after 3-5 years. The current law removed that distinction entirely for contracts issued under it.