Gratuity Calculator UAE 2025

Gratuity Calculator UAE


How to Calculate Gratuity in UAE

Understanding how to calculate gratuity in UAE might initially seem overwhelming, but fortunately, tools like a gratuity calculator Dubai or gratuity calculator Abu Dhabi can greatly simplify the process. According to Article 132 of UAE Federal Law No. 8 of 1980 (as amended), employees who complete at least one year of continuous service are entitled to an end-of-service gratuity. If you’re wrapping up employment after two years or managing an unlimited contract, this practical guide, combined with trusted resources such as the MOHRE gratuity calculator, can help you plan your finances clearly and easily.

Formula for Gratuity Calculation in UAE

Gratuity, commonly known as end-of-service benefits, serves as a financial reward for employees at the conclusion of their employment tenure. The calculation primarily includes your basic salary and how long you’ve worked with the company. To accurately estimate your gratuity amount, it’s best to utilize an end of service calculator UAE rather than performing manual calculations.
Here’s the exact formula:
  • Less than 5 years: Gratuity = (Basic Monthly Salary / 30) × 21 × Number of Years Worked
  • More than 5 years: Gratuity = ((Basic Monthly Salary / 30) × 21 × 5) + ((Basic Monthly Salary / 30) × 21 × (Number of Years Worked – 5))

How to Calculate Gratuity in UAE for Unlimited Contract

Employees on unlimited contracts can effectively calculate gratuity by using a gratuity calculator Dubai or gratuity calculator Abu Dhabi. The calculation depends on your employment duration and basic salary at the end of your service. Here are the guidelines:
  • Less than 1 year: No gratuity is payable.
  • 1-5 years: You’re eligible for 21 days’ basic salary per year of service.
  • More than 5 years: 21 days per year for the initial five years plus 30 days for every additional year.

Example: Suppose your basic monthly salary is AED 10,000, and you’ve completed 6 years under an unlimited contract:

  • First 5 years: (AED 10,000 ÷ 30 days) × 21 days × 5 years = AED 35,000
  • 6th year: (AED 10,000 ÷ 30 days) × 30 days × 1 year = AED 10,000

Total Gratuity: AED 45,000

Total Gratuity: AED 45,000

How to Calculate Gratuity in UAE for 2 Years

If you’ve worked exactly two years, calculating gratuity is straightforward. Here’s a simple way to estimate it using a MOHRE gratuity calculator:

  • Formula: (Basic Monthly Salary ÷ 30) × 21 days × Number of Years

Example: With a basic salary of AED 8,000 per month:

  • (AED 8,000 ÷ 30 days) × 21 days × 2 years = AED 11,200
After two years, your gratuity will total AED 11,200.

Important Factors to Consider Before Calculating Your End of Service Gratuity in UAE

  • Clearly identify your contract type (limited or unlimited).
  • Verify your most recent basic salary since this is vital for accurate calculations.
  • Account for any unpaid leave or absences, as these may influence your gratuity amount.
  • Stay updated on any recent legislative adjustments that might impact your calculation.
  • Always confirm details with your HR department to maintain accurate and verified records.

Frequently Asked Questions (FAQs) about End of Service Gratuity in UAE

Q: What is the minimum duration of service required to receive gratuity?
A: You must complete at least one year of continuous service.
Q: Is gratuity calculated on my entire salary?
A: No, gratuity is calculated based on your basic salary only, excluding allowances.
Q: Can unpaid leave affect my gratuity calculation?
A: Yes, periods of unpaid leave or absences are typically excluded from the gratuity calculation.
Q: What if I resign before completing one year?
A: Employees resigning before completing one full year are generally not entitled to gratuity.
Q: Do part-time employees receive gratuity?
A: Generally, gratuity applies to full-time employees, but it’s advisable to verify with HR based on your specific employment contract.
Q: Can the gratuity amount change due to company policy?
A: While gratuity calculation follows UAE labor law, some companies may offer additional benefits as per their internal policies. Always confirm with HR.
For further personalized queries, consider speaking directly with your HR department or a legal professional. Please note, the results provided by the gratuity calculator tool on our website are approximate and should be verified with your HR department or a legal advisor for exact figures.

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