End of Service Calculator UAE

End of Service Calculator UAE – Estimate Your EOSB Pay

An End of Service Calculator for the UAE is a crucial tool for employees, calculating the end-of-service gratuity as mandated by the UAE Labour Law (Federal Decree-Law No. 33 of 2021). By entering details such as basic salary, contract type (limited or unlimited), years of service, and termination reason (resignation or termination), it estimates the gratuity payout, aiding in financial planning during job transitions.

The gratuity is based on the last basic salary (excluding allowances like housing or transport). For both contract types, employees with 1–5 years of service receive 21 days’ basic salary per year; over 5 years, 30 days per year, capped at two years’ total salary. For unlimited contracts, resignation reduces gratuity: 1–3 years (1/3 of 21 days/year), 3–5 years (2/3 of 21 days/year), full gratuity after 5 years. For example, an employee with a AED 6,000 basic salary and 7 years on a limited contract receives AED 45,000 (5 × 21 × 6,000/30 + 2 × 30 × 6,000/30). Non-reckonable absences, like unpaid leave, are excluded.

Benefits include ensuring fair payouts, budgeting for transitions, and verifying employer calculations. Calculators from the Ministry of Human Resources and Emiratisation (MoHRE) or Dubai Development Authority (DDA) provide reliable estimates.

The End of Service Calculator UAE is a valuable online tool designed to help employees and employers in the United Arab Emirates estimate gratuity payments, also known as end-of-service benefits, as mandated by UAE Labour Law. This lump-sum payment is awarded to employees upon leaving their job after a minimum period of service, serving as a token of appreciation for their contributions. With the complexities of gratuity calculations under Federal Decree-Law No. 33 of 2021, the calculator simplifies the process for expatriates, UAE nationals, and domestic workers across Dubai, Abu Dhabi, Sharjah, and other emirates.

What is the End of Service Calculator UAE?

The End of Service Calculator UAE is a digital tool that computes gratuity payments based on an employee’s basic salary, length of service, contract type (limited or unlimited), and reason for termination (resignation or dismissal). Governed by the UAE Labour Law, particularly Article 51, gratuity is a mandatory benefit for employees in the private sector and, since November 2024, optionally for Emirati employees under the Ministry of Human Resources and Emiratisation (MoHRE) voluntary scheme. Calculators are available on platforms like dda.gov.ae, zoho.com, gratuitycalculator.ae, and gulfnews.com, providing estimates compliant with UAE regulations, including those for free zones like Jebel Ali Free Zone (JAFZA) and Dubai International Financial Centre (DIFC).

How Does the UAE Gratuity System Work?

Gratuity, or end-of-service benefits, is a mandatory payment under Article 132 of the UAE Labour Law for employees completing at least one year of continuous service. The system is governed by Federal Decree-Law No. 33 of 2021, which replaced the 1980 Labour Law, and applies to private-sector workers, domestic workers, and, optionally, Emiratis via MoHRE’s investment fund scheme. Key aspects include:

Eligibility:

• Minimum one year of continuous service (unpaid absences excluded).
• Applies to full-time employees (part-time workers may not qualify).
• Covers expatriates, UAE nationals (via MoHRE scheme), and domestic workers.
• Employees terminated under Article 120 (e.g., for gross misconduct) may lose gratuity.

Calculation Basis:

• Basic Salary: Only the last drawn basic salary is used, excluding allowances (housing, transport, overtime, bonuses).
• Daily Wage: Basic salary ÷ 30 days.
• Service Duration: Rounded to the nearest year, excluding unpaid leave.

Contract Types:

• Limited Contract (fixed-term, max 4 years, renewable):
• 1–5 years: 21 days’ basic salary per year.
• 5 years: 21 days for first 5 years + 30 days per additional year.
• Total gratuity capped at 2 years’ basic salary.
• Resignation before contract end may forfeit gratuity (Article 138).

Unlimited Contract (no fixed term):

• <1 year: No gratuity.
• 1–3 years (resignation): ⅓ of 21 days’ basic salary per year.
• 3–5 years (resignation): ⅔ of 21 days’ basic salary per year.
• 5 years (resignation) or termination (any duration): 21 days for first 5 years + 30 days per additional year, capped at 2 years’ salary.
• Transition Note: Since 2021, unlimited contracts must transition to limited contracts, affecting gratuity calculations for existing employees.

Free Zones:

• JAFZA and DMCC follow UAE Labour Law but require final approval from their labour sections.
• DIFC uses a different formula: 8.93% of basic salary for >5 years’ service.

Payment Timeline: Gratuity must be paid within 14 days of contract termination, along with final settlement (e.g., unused leave, outstanding salary).

MoHRE Scheme (2023): Employers can opt into an investment fund for Emirati employees, contributing to a gratuity pool. Employees can withdraw funds plus returns upon leaving or continue investing.

Example Calculation

For an employee with a basic salary of AED 10,000, employed from January 1, 2018, to April 30, 2025 (7 years, 4 months, rounded to 7 years):

Limited Contract (Termination):

• Daily Wage: 10,000 ÷ 30 = AED 333.33
• First 5 years: 21 × 333.33 × 5 = AED 35,000
• Additional 2 years: 30 × 333.33 × 2 = AED 20,000
• Total: 35,000 + 20,000 = AED 55,000 (capped at 2 years’ salary, AED 240,000)

Unlimited Contract (Resignation):

• First 5 years: 21 × 333.33 × 5 = AED 35,000
• Additional 2 years: 30 × 333.33 × 2 = AED 20,000
• Total: 35,000 + 20,000 = AED 55,000

Unlimited Contract (Resignation, 2 years):

• Daily Wage: 333.33
• 1–3 years: (⅓) × 21 × 333.33 × 2 = AED 4,666.62
• Total: AED 4,666.62

The calculator automates these computations, adjusting for contract type and termination reason.

Our End of Service Calculator UAE is a free, easy-to-use tool designed to help employees and HR professionals across the United Arab Emirates calculate end-of-service benefits (gratuity) based on the UAE Labour Law (Federal Decree Law No. 33 of 2021). Whether you’re in Dubai, Abu Dhabi, Sharjah, or a free zone like DIFC or ADGM, this calculator provides accurate estimates for your gratuity entitlement.