Gratuity calculator UAE 2026: Calculate your end-of-service benefits

End-of-service gratuity is one of the most important payments employees in the UAE need to understand when leaving a job. Whether you are resigning, moving to a new role or approaching retirement, this gratuity calculator can help you estimate how much you may be entitled to receive under the UAE Labour Law as of 2026. Enter your basic salary, employment dates and reason for leaving to get an indicative gratuity amount.

What is gratuity in the UAE?

Gratuity, also known as end-of-service benefits, is a lump-sum payment made to eligible employees when their employment in the UAE ends.

Under the UAE Labour Law, employees who complete at least one year of continuous service are generally entitled to gratuity, calculated on their basic salary and eligible period of service. The payment recognises an employee’s years of service and is usually paid as part of the final settlement when they leave a job.

The standard gratuity calculation may not apply to all workers. Some employees, including those covered by pension schemes, domestic worker rules or special employment regimes, may be subject to separate end-of-service benefit, pension or gratuity arrangements.

How is gratuity calculated in the UAE?

Gratuity is generally calculated using the employee’s basic salary. Allowances such as housing, transport, schooling, bonuses, overtime and other benefits are not usually included in the standard gratuity calculation.

Step 1: Calculate your daily wageDaily wage = Basic monthly salary ÷ 30

Step 2: Apply the gratuity formula
For the first five years of service: 21 days of basic salary for each year of service.
For service exceeding five years: 30 days of basic salary for each additional year.

Once an employee completes at least one year of continuous service, any part of a year is calculated proportionately.

Formula
Gratuity = (21 × daily wage × years up to 5) + (30 × daily wage × years beyond 5)

Maximum gratuity limit
Under the UAE Labour Law, the total end-of-service gratuity must not exceed two years' wage.

Gratuity calculation examples

Example 1: Less than five years of service
Basic salary: Dh8,000
Service period: 4 years
Daily wage: Dh8,000 ÷ 30 = Dh266.67
Gratuity: 21 × Dh266.67 × 4 = Dh22,400

Example 2: More than five years of service
Basic salary: Dh12,000
Service period: 8 years
Daily wage: Dh12,000 ÷ 30 = Dh400
First 5 years: 21 × Dh400 × 5 = Dh42,000
Additional 3 years: 30 × Dh400 × 3 = Dh36,000
Total gratuity: Dh78,000

Who is eligible for gratuity in the UAE?

• are covered by the standard UAE Labour Law gratuity rules
• complete at least one year of continuous service
• leave employment through resignation, termination, retirement or mutual agreement.

Does resignation affect gratuity?

Under the UAE Labour Law, employees who resign after completing at least one year of continuous service are generally entitled to gratuity under the standard calculation. The formula is 21 days of basic salary for each year of the first five years of service, and 30 days of basic salary for each year beyond five years.

The formula applies whether the employee resigns or is terminated, provided the employee is covered by the standard gratuity rules and meets the eligibility requirements.

However, the final amount may be affected by the employment contract, unpaid leave, lawful deductions, the eligible service period, the employee’s work pattern, any applicable special regime and court judgments. Employees should review their contract and seek HR or legal advice before relying solely on a calculator estimate.

Is gratuity calculated on basic salary or gross salary?

• Fixed basic monthly salary

• Housing allowance
• Transport allowance
• Schooling allowance
• Overtime payments
• Bonuses
• Commissions
• Other allowances, benefits or variable payments.

Gratuity is generally calculated on basic salary, not gross salary. Employees should check their employment contract carefully to identify the correct basic salary figure before estimating their entitlement.