Gratuity Calculator Dubai: Calculating End-of-Service Benefits

Are you an employee in Dubai wondering how much gratuity you’re entitled to when leaving your job? Or perhaps you’re an employer ensuring compliance with UAE Labour Law? A gratuity calculator for Dubai is your go-to tool for quickly estimating end-of-service benefits.

What is a Gratuity Calculator for Dubai?

A gratuity calculator is an online tool that helps employees and employers estimate the end-of-service gratuity payment, a mandatory benefit under UAE Labour Law. This payment rewards employees for their service after completing at least one year of continuous work. Whether you’re on a limited (fixed-term) or unlimited (open-ended) contract, a gratuity calculator simplifies the process by using your basic salary and years of service to provide an accurate estimate.

In Dubai, gratuity rules are governed by UAE Federal Decree Law No. 33 of 2021 (updated in 2025), except in the Dubai International Financial Centre (DIFC), which follows a different system. With a gratuity calculator, you can avoid manual calculations and ensure compliance with the latest regulations.

How to Calculate Gratuity in UAE?

Gratuity is a mandatory end-of-service payment for UAE private sector employees under UAE Labour Law (Federal Decree-Law No. 33 of 2021). It’s based on basic salary, service years, and contract type (limited or unlimited).
Also Used: Overtime Calculation in UAE

Eligibility

• Complete 1+ year of continuous service.

• Not dismissed for gross misconduct (e.g., theft, fraud).

• Excludes government workers, domestic workers, DIFC/ADGM employees.

Calculation Rules

• Basic Salary: Excludes allowances, bonuses, commissions.

• Service Years: Prorate partial years (e.g., 3 years, 6 months = 3.5).

• Cap: Maximum 2 years’ basic salary.

• Contract Types:

  • Limited: Fixed-term, forfeiture if resigning early (1–5 years).

  • Unlimited: Open-ended, reduced gratuity if resigning.

Formulas

1. Unlimited Contract:

   • 1–5 years: (Basic Salary / 30) × 21 × Years

   • Over 5 years: (Basic Salary / 30) × 30 × Years Beyond 5

   • Resignation Penalty:

     • 3–5 years: 2/3 gratuity.

     • Over 5 years: 1/3 gratuity.

   • Employer termination: Full gratuity.

2. Limited Contract:

   • Same as unlimited, but resignation before contract end (1–5 years) forfeits gratuity.

3. Partial Years: (Basic Salary / 30) × 21 (or 30) × (Months / 12)

Example

• Basic Salary: AED 6,000/month

• Service: 6 years, unlimited contract

• Resignation:

  • First 5 years: (6,000 / 30) × 21 × 5 = AED 21,000

  • Year 6: (6,000 / 30) × 30 × 1 = AED 6,000

  • Total: 21,000 + 6,000 = AED 27,000

  • Penalty: 27,000 × 1/3 = AED 9,000

• Termination: Full AED 27,000

How Does a Gratuity Calculator Work?

A gratuity calculator for Dubai uses a straightforward process to estimate your end-of-service benefits. Here’s what you need to input:

1. Basic Salary: Your base salary, excluding allowances like housing, transport, or bonuses.
2. Contract Type: Limited or unlimited (note: post-2023, all contracts are limited with a maximum of five years).
3. Years of Service: The total duration of your employment, calculated from your start date to the end date.
4. Reason for Leaving: Whether you resigned, were terminated, or completed your contract, as this impacts the payout.

Once you enter these details, the calculator applies UAE Labour Law formulas to generate an estimate. Let’s break down the calculation rules.

Who is Eligible for Gratuity in Dubai?

To qualify for gratuity:

• You must complete at least one year of continuous service.
• You must be employed in the private sector (UAE nationals may have different schemes).
• Expatriate workers are fully entitled.

You may not receive gratuity if:

• You resign before completing one year.
• You’re dismissed for gross misconduct (per Article 120 of UAE Labour Law).
• You resign without proper notice (except in specific cases).

Recent Updates: UAE Savings Scheme

In November 2025, the UAE introduced a voluntary Savings Scheme as an alternative to traditional gratuity. Employers can contribute to an investment fund, and employees receive the contribution plus returns upon leaving. This scheme protects against inflation but is optional and not yet integrated into most calculators. Check with your employer to see if they’ve adopted this system.

Why Gratuity Matters in Dubai

Gratuity is more than just a payout—it’s a reflection of your hard work and a key financial resource. For employees, it supports post-employment plans, whether relocating, starting a business, or settling debts. For employers, accurate gratuity payments demonstrate compliance and foster trust. With Dubai’s diverse workforce and evolving labour laws, a gratuity calculator is an essential tool for transparency and financial planning.

Conclusion

A gratuity calculator for Dubai is your ticket to understanding your end-of-service benefits quickly and accurately. Whether you’re an employee planning your next move or an employer ensuring compliance. Stay informed about your rights, verify your inputs, and consult MoHRE for any discrepancies. Calculate your gratuity today and take control of your financial future in Dubai!