Online Gratuity Calculator UAE 2025 (Updated with MOHRE)
Your reliable end-of-service benefits calculator in UAE!
Gratuity Calculator UAE
What is Gratuity (مكافأة) in UAE?
Gratuity in the UAE, referred to in Arabic as مكافأة نهاية الخدمة (the gratuity meaning in Dubai & UAE Arabic), is a legal lump-sum payment an employer must provide as an end-of-service benefit (EOSB) to appreciate the years an employee has completed under UAE Labour Law Article 51. This article explains the entitlement clearly under the updated UAE labour rules, while tools like Gratuity Calculator UAE make it easier for workers to understand and view what they are owed.
Many employees across the UAE are still unsure about their gratuity benefits, the existing gratuity policies, and the full method of how gratuity is calculated in the UAE, including the required service period, the factors that shape the final amount, and the conditions that may change their entitlement. These gaps in understanding often lead to manual errors, discrepancies, and incorrect gratuity calculations. To simplify the process, users can calculate gratuity online through this tool, which provides a clear and accurate breakdown using the official UAE Gratuity Calculation method.
What is Gratuity Calculator UAE Online?
The Gratuity Calculator UAE is a practical online tool that helps you determine the correct gratuity payment included in your full and final settlement when you leave a job in Dubai or anywhere in the UAE, following the rules of UAE labor law, whether you resign or are terminated after completing one year of service. It provides clear and accurate results — similar to the gratuity calculator Dubai by assessing key points such as basic salary, your contract type (limited or unlimited), and the total years of service.
For anyone who is unsure about how to calculate UAE gratuity or understand their end-of-service benefits, the UAE Gratuity Calculator makes the process simple by estimating the final gratuity amount based on Dubai Labour Law. By entering the correct information into the gratuity calculator UAE tool, users can quickly see the end-of-service gratuity payment they are entitled to receive upon resignation or termination.
How does UAE Gratuity Calculator works?
Manual financial calculations often lead to incorrect gratuity amounts, repeated mistakes, and calculation issues, which is why the free online gratuity calculator UAE was created—to make the UAE gratuity calculation process smoother and help you know exactly how much you may receive as your end-of-service benefit. By entering accurate details into the tool, you avoid common errors and get a clear, reliable estimate.
Need mobile access? Our Android app Gratuity Calculator UAE App brings the same accurate calculations to your phone with complete privacy and offline capability.
Benefits of Using a Gratuity Calculator MOHRE
The benefits become clear when you see how using the UAE gratuity calculator excel can resolve many issues by providing the essential features needed for accurate end-of-service results. Tools like the Jafza gratuity calculator make the entire gratuity calculation process:
How gratuity is calculated in the UAE?
UAE gratuity is calculated by applying:
Among the key points to remember;
Who is Eligible for Gratuity?
This question matters because every employee in the UAE—whether working in Dubai, Abu Dhabi, or Sharjah—becomes eligible for a UAE gratuity payment once they meet the required conditions.
To qualify for gratuity under UAE labour law:
Key Steps for Understanding and Calculating End-of-Service Benefits in the UAE
Under Article 51, the latest UAE Labour Law requires employers to provide gratuity to expatriate private-sector employees once they complete one full year of service.
To determine this amount accurately, workers can use an online end of service calculator Abu Dhabi or the gratuity calculator UAE, where they enter essential details—such as basic salary, the total duration of service, and the type of contract — all of which directly shape the gratuity they are entitled to receive at the end of the retirement or job exit.
Meet the Minimum Service Requirement
The number of service years is a key factor used to calculate gratuity UAE, as both private and public sector employees must complete one year of service to qualify for a gratuity payment.
The gratuity calculator UAE tool does not apply to anyone with less than one year of completed service, because eligibility begins only after this minimum period is fulfilled. If an employee leaves the job—whether through resignation or termination—before completing one full year of service, they are not eligible to receive any gratuity benefits in the UAE.
Understanding Basic Salary Calculation in UAE
Understanding basic salary in Dubai is essential because, under Article 134, all allowances, bonuses, and perks are excluded when calculating gratuity. This makes the basic salary a key factor in ensuring accurate results in the gratuity calculator UAE or EOSB calculator, where entering the correct AED amount is necessary to avoid errors or misunderstandings.
For example, if a monthly gross salary is AED 20,000 with transport and housing allowances included, but the actual basic salary is AED 12,000, then the gratuity is calculated only on AED 12,000. Entering the correct figure in the basic salary calculator UAE ensures the right outcome, and the gratuity calculator for private employees follows the same method to give a precise and reliable gratuity estimate.
Identify Your Contract Type
Correctly using the UAE gratuity calculation formula requires choosing the right employment contract type, as the calculation varies depending on whether you were employed under a limited contract or an unlimited contract. Selecting the accurate option is essential because employers in the UAE apply a specific gratuity calculation method based on the contract you held.
Specify the Reason for Leaving
The way you leave your job has a direct effect on the results shown in the gratuity calculator UAE, because whether your exit is through resignation or termination influences the final gratuity calculation amount. By entering this detail correctly, you avoid errors and ensure the tool provides an accurate and reliable outcome.
Enter Your Service Duration
Entering the correct date of joining and date of separation (your last working day) in the gratuity calculator UAE is essential, as these details allow the tool to apply the gratuity calculator formula accurately based on your total service year. Once you provide the start and end dates of your employment, the calculator generates a precise end-of-service gratuity amount, making it easy for employees to estimate their gratuity benefits with confidence.
Types of Employment Contracts in the UAE
It’s important to understand that the UAE labour law has undergone major updates in recent years. In the past, employees were hired under two employment contract types— limited and unlimited. Under the new law, unlimited contracts have been fully suspended, and all private-sector workers now follow a single standardised format known as the limited contract, which is also referred to as a fixed-term contract. Here’s a closer look at how each one works.
Limited Contract
In the UAE, the limited contract is now the standard form of employment, operating as a fixed-term agreement with a clearly stated start and end date—usually two or three years—providing both the employer and the employee with clarity and stability throughout the contract period. This contract can be extended when both parties agree, and any renewal may include updated terms and a revised salary.
One of the most important changes under the new law is that the old rule about losing gratuity for leaving early no longer applies. If you have completed more than one year of service, you can resign before your limited contract ends and still qualify for your full gratuity, as long as you serve the notice period mentioned in your employment agreement, which is typically between 30 and 90 days.
Unlimited Contract
The unlimited contract, which had no defined end date, was officially eliminated from UAE labour law in February 2023 and is no longer issued, although many employees still recall the old rules that often created confusion.
Under the previous system, the major problem with unlimited contracts was the gratuity calculation during resignation, because anyone who resigned faced significant deductions:
Under the new UAE labour law, the previous deduction system has been removed, and with all employment now shifted to limited contracts, employees who complete at least one year of service are entitled to receive their full gratuity without any reduction.
Contract Renewals
According to UAE Labour Law Article 38, when a limited contract is renewed, it becomes a new agreement but is still treated as a continuation of the original contract for gratuity purposes. This means your gratuity amount is calculated according to the total number of years you have completed with the same employer.
If this sounds unclear, the simple rule is: all service years from both contracts—whether the contract is limited or renewed—are combined when calculating gratuity in the UAE, even if the renewal looks like a completely new contract.
Gratuity Calculation Formula as per UAE Labour Law
The Gratuity Calculation Formula as per UAE Labour Law follows a general structure used across all UAE gratuity calculation methods:
Gratuity = Basic Salary × Gratuity Days Per Year × Number of Service Years.
The number of gratuity days per year depends on the type of employment contract and the length of service (Service Years), meaning the final gratuity calculation formula changes based on whether the employee held a limited or unlimited contract. To make it clear, let’s break down each category.
For Limited Contracts:
Service Years: 1 to 5: Gratuity = (Basic salary × 21 days × service years) ÷ 30
Service Years: More than 5 Year: Gratuity= (Basic salary × 30 days × service years) ÷ 30
For Unlimited Contracts:
The end-of-service benefit rules vary depending on whether the employee resigned or was terminated, so it is important to apply the correct calculation formula for each scenario.
In Case of Resignation
Service Year | Gratuity Calculation |
Resigning before 1 year | No gratuity |
Resigning after 1–3 years | One-third (1/3) of 21 days’ basic salary for each year (Article 137) |
Resigning after 3–5 years | Two-thirds (2/3) of 21 days’ basic salary for each year (Article 137) |
Resigning after 5 years | 21 days of basic salary for each of the first 5 years + 30 days of basic salary for every additional year |
In Case of Termination
Service Year | Gratuity Calculation |
Terminated before 1 year | No gratuity |
Terminated after 1 but less than 5 years | 21 days of basic pay for each completed year |
Terminated after 5 years | 21 days of basic pay for the first 5 years + 30 days of basic pay for each year after (Article 132) |
Resignation vs Termination Gratuity Calculation Comparison
Service Year | Resignation | Termination |
Before 1 year | No gratuity | No gratuity |
After 1–3 years | One-third (1/3) of 21 days’ basic salary for each year | 21 days of basic pay for each year |
After 3–5 years | Two-thirds (2/3) of 21 days’ basic salary for each year | 21 days of basic pay for each year |
After 5 years | 21 days of basic salary for the first 5 years, then 30 days for each additional year | 21 days of basic pay for the first 5 years, then 30 days for each additional year |
Difference between Limited and Unlimited Contract
Limited Contract
Unlimited Contract:
Limited vs Unlimited Contract Gratuity Comparison
Scenario | Limited Contract | Unlimited Contract |
Resignation < 1 year | No gratuity | No gratuity |
Resignation 1–3 years | 21 days per year | 1/3 of 21 days per year |
Resignation 3–5 years | 21 days per year | 2/3 of 21 days per year |
Resignation 5+ years | 21 days (first 5 years) + 30 days after | Full gratuity (same formula) |
Termination < 1 year | No gratuity | No gratuity |
Termination 1–5 years | 21 days per year | 21 days per year |
Termination 5+ years | 21 days (first 5 years) + 30 days after | 21 days (first 5 years) + 30 days after |
Example Scenario
Example 1: Limited Contract — 7 Years of Service
- Basic Salary: AED 8,000
- Service: 7 years
- Formula:
- First 5 years → 21 days per year
- After 5 years → 30 days per year
Step-by-step:
- Step 1: Calculate Daily Wage
- Daily wage = 8,000 ÷ 30 = AED 266.67
- Step 2: Calculate Gratuity for the First 5 Years
- First 5 years = (266.67 × 21 × 5) = AED 28,000.35
- Step 3: Calculate Gratuity for Additional Year
- Next 2 years = (266.67 × 30 × 2) = AED 16,000.20
- Total gratuity = 28,000.35 + 16,000.20
- ✅ Gratuity = AED 44,000.55
Example 2: Unlimited Contract — Resignation After 2 Years
(These follow Article 137 rules: 1/3, 2/3, full)
- Basic Salary: AED 12,000
- Service: 2 years
- Formula: 1/3 of 21 days per year
Step-by-step:
- Step 1: Calculate Daily Wage
- Daily wage = 12,000 ÷ 30 = AED 400
- Step 2: Calculate Full Gratuity Per Year
- Full gratuity per year = 400 × 21 = AED 8,400
- Step 3: Apply 1/3 Rule
- Apply 1/3 = 8,400 × 1/3 = AED 2,800
- Total for 2 years = 2,800 × 2 = AED 5,600
- ✅ Gratuity = AED 5,600
Maximum Limit on Gratuity
Under the new UAE labour law, the total gratuity an employee can receive is capped and cannot exceed the value of two years of basic salary, regardless of how many additional years of service are completed. This maximum limit is clearly defined in the UAE Labour Law and applies to all employees when calculating their gratuity entitlement.
Mathematical Example of Gratuity Maximum Limit
- Basic Salary: AED 10,000
- Maximum Allowed Gratuity = Basic Salary × 24 months
- 10,000 × 24 = AED 240,000
- If your calculated gratuity is AED 320,000, the law caps it at:
- ✅ Final Gratuity Payable = AED 240,000
Can Gratuity be Denied?
An employer can deny gratuity under Article 139 of UAE Labour Law.
What Happens When Employers Don’t Pay Gratuity?
Under UAE labour law, an employer must release the gratuity payment once the end of service period is completed.
How to Calculate Final Settlement in UAE?
To work out the Full and Final Settlement (FFS) for an employee who is leaving the job, you need to add all payable dues, which may include overtime calculation, unused annual leaves, end of service gratuity, overtime, bonuses, notice pay, and any unpaid salary, then subtract the deductions related to loans, advances, or installments.
Under labour law Article 53, this process must be accurate, and workers can use the UAE salary check calculator for instant results. Tools like the UAE Settlement Calculator help simplify the final settlement calculation.
Final Settlement = (Unpaid Salary + Leave Encashment + Gratuity + Other Allowances) – Deductions
Gratuity for Domestic Workers
Gratuity for domestic workers in the UAE is calculated using a specific gratuity calculation formula that applies to housemaids and all domestic staff under the UAE Domestic Workers Law, which differs from the rules in the general UAE Labour Law.
Under this system, gratuity is based on one month’s salary, calculated using the worker’s final salary (last basic salary) and their total number of service years, ensuring the correct end-of-service benefit is determined. To make this easier, the gratuity calculator UAE for domestic workers provides a clear and accurate estimate for anyone employed in a domestic role. Let’s take a moment to review and understand the UAE gratuity calculation methods for domestic workers.
Important Notes:
Under UAE Labour Law, gratuity is a mandatory end-of-service entitlement for employees who complete long-term service, and it must be paid when an employee leaves the company after completing one year of service. The gratuity amount is calculated based on the employee’s UAE basic salary and total service years, and the employer is responsible for paying this amount at the time of separation.
A tip, however, is completely different—it is a voluntary appreciation payment given by a customer for the quality of service received, decided entirely at the customer’s discretion. The employer has no involvement in tips, and they are not covered under any labour law.
Many employees in the UAE often feel confused when they hear the term “tip” as they may assume it means the same as gratuity. To clear things up, here’s an easy explanation of gratuity vs tip, along with a look at a tip calculator, so you can see how these two are completely different.
Tips to Maximize Your Gratuity
Understand UAE Labor Law
Understanding UAE Labour Law is essential for every employee working in the UAE, including Dubai and Sharjah, because knowing these rules directly affects how daily wages are calculated, how basic salary is determined, and how the terms of leaving a job or ending a contract are applied under the official UAE gratuity calculation methods.
Following the UAE gratuity calculator MOHRE guidelines helps ensure employees are not underpaid or misinformed about their legal rights, including the minimum requirements for gratuity eligibility, employer obligations, contract rules, end-of-service benefits, and other employment terms, allowing them to avoid errors and protect their rightful benefits.
Review Your Employment Contract
By reviewing your employment contract carefully, you can clearly understand the legally binding details that affect your gratuity, including your salary, your contract type—limited or unlimited—and the conditions for termination and resignation. This document outlines the contract duration, company policies, job role, potential promotions, and the rules used for end-of-service benefit calculations, helping you know exactly which benefits you are entitled to and how each term may influence your gratuity.
Keeping this information organised allows you to verify your benefits and ensure accurate calculations. Always make sure your employment contract aligns with the latest UAE labour law guidelines to avoid discrepancies and prevent future conflicts.
Keep Detailed Work Records
Maintaining a complete record of your employment documents can save time and prevent potential legal disputes, as items such as offer letters, contract copies, visa details, start and end dates, communication history, and promotion records are essential for resolving conflicts.
Keeping an organized file with your UAE labour card, work permit, written letters, memos, salary slips, individual offer letters, each contract renewal, appointment letter, joining report, JD, and all employment-related emails ensures you always have clear proof of your service details. Accurate and complete records make it much easier to apply the correct formula for calculating gratuity amounts using the gratuity calculator UAE, ensuring your entitlement is calculated correctly.
Seek Professional and Legal Assistance if Needed
Whenever you are uncertain about your rights or how your gratuity is being calculated, you can consult an HR expert, legal advisor, or labour consultant in the UAE to ensure your entitlement is correctly assessed and that all parts of your contract are properly followed.
You may also hire a UAE labour law specialist to safeguard your benefits and provide further guidance. In addition, using a gratuity calculator for the UAE offers a clear estimate of your payout and supports more informed financial decisions, helping you protect your long-term financial interests.
Complete the Notice Period
If you leave your job on good terms, your employer cannot deny your gratuity under UAE labour law, provided you serve the required 30-day notice period after submitting your resignation. During this period, you must continue performing your duties as normal throughout the full notice duration.
Calculate Your Gratuity
By using the indemnity calculator or the gratuity calculator UAE, you can clearly see your expected gratuity amount before leaving your job. When you compare this calculated figure with your FFS, you can feel confident and avoid financial stress while preparing for your final settlement.
Get Clearance from Employer
You should obtain clearance from your employer using the official clearance form, which helps settle any pending amounts you owe, including loans and advances. Securing this clearance before leaving your job keeps you stress-free in the UAE, and once the process is completed, the employer cannot deduct any additional amount from the gratuity percentage in your salary.
Discuss Concerns with your Employer
If you notice any difference in your UAE end-of-service calculation—whether it involves your gratuity, or PF calculator —address it directly with your employer in a calm and professional manner to ensure every detail is accurate and clearly understood.
Follow Up Politely
If your employer delays addressing your gratuity concern, follow up politely and allow a reasonable time for a response. If no update is provided, you can escalate the matter to the Ministry of Human Resources and Emiratisation (MOHRE) or contact the Ministry of Labour UAE (MOL UAE) to ensure your rights are fully protected under UAE law.
Common Mistakes to Avoid
Misinterpreting Basic Salary
One of the most common mistakes in gratuity calculation occurs when workers misunderstand how the benefit should be computed and incorrectly include allowances such as transportation, housing, and bonuses, leading them to rely on their gross salary and ending up with inaccurate results.
Another frequent error happens when employees confuse their net salary with the basic salary required for calculating gratuity in the UAE. Since gratuity must always be calculated using basic salary only.
Incorrect Service Duration
Incorrect service duration is one of the most common issues that affects gratuity, because the total number of years—and any partial years—you have worked must be calculated accurately. Overestimating or underestimating your service period can directly change the payout.
Since service years are one of the most important factors in calculating gratuity in the UAE, the exact time you worked must match your correct date of joining and last working day, especially when using the gratuity calculator Abu Dhabi to get 100% accurate results. You must also complete at least one full year of service, as a gratuity calculator in months does not apply for eligibility.
Not Knowing Contract Type
Not knowing your contract type is another common reason gratuity calculations go wrong, as many employees are unsure whether they are working under a limited or unlimited contract. This confusion often leads to applying the wrong gratuity calculation formula, resulting in incorrect expectations or unexpected surprises at the time of departure. When the contract type is unclear, using an EOS calculator becomes unreliable, and entering the wrong details may leave you shocked when you receive your FFS from your employer.
Misunderstanding Gratuity Rights
This issue often occurs when employees are unsure about their gratuity entitlement, which depends on several factors such as contract type, the duration of employment, and the reason for job termination under UAE Labour Law. This confusion can lead to missed benefits and unnecessary disappointment.
Final Thoughts
Using the Gratuity Calculator UAE allows UAE based employees to calculate their gratuity digitally in seconds, ensuring they receive the right gratuity when leaving the company and clearly understand how gratuity in salary functions as an essential part of their end-of-service benefits. Whether you work in Dubai, Sharjah, or Abu Dhabi, tools like the end-of-service calculator Dubai help you follow UAE labour law guidelines, read your employment contract correctly, and apply the relevant labour law to produce accurate results.
Keeping your salary check UAE information and employment records up to date protects your legal rights and ensures your calculation follows MOHRE guidelines when determining your gratuity amount. With a proper understanding of the calculation rules, both employees and employers can handle cases of resigned or terminated staff, apply the correct formula for years of service, review their contracts, and receive the rightful gratuity they are entitled to without confusion.