Gratuity Calculator

Gratuity Calculator – Dubai EOSB Tool

A Dubai Gratuity Calculator is a useful tool for UAE workers, estimating end-of-service benefit (gratuity) based on the UAE Labour Law (Federal Decree-Law No. 33 of 2021). By providing information like basic salary, type of contract (limited or unlimited), years of service, and termination reason (resignation or termination), it calculates the gratuity amount to be paid, helping with budgeting.

Gratuity is calculated on the basis of the last basic salary, ignoring allowances (like housing, transport). For both types of contracts, 1–5 years’ service gets 21 days’ basic salary per annum; more than 5 years, 30 days per annum, limited to two years’ salary. For unlimited contracts, resignation cuts gratuity: 1–3 years (1/3 of 21 days/year), 3–5 years (2/3 of 21 days/year), and full gratuity after five years. For example, minimum salary AED 5,000 for a 6-year service under a limited contract is AED 35,000 (5 × 21 × 5,000/30 + 1 × 30 × 5,000/30). Unpaid leave days are excluded.

Advantages include rendering equitable pay fair, planning career switches, and verifying employer calculations. Dubai Development Authority (DDA) and MoHRE offer precise calculators, even though output is an estimate, not legally binding.

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

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.

Limited Contract:

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

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).

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. Calculating gratuity in Dubai can be complex due to varying contract types and free zone rules.

Our calculator simplifies the process with:

• Accurate Calculations: Estimates gratuity based on UAE Labour Law (Federal Decree Law No. 33 of 2021) and Dubai free zone regulations.

• Interactive Chart: Visualizes basic salary, gratuity amount, and service duration breakdown.

• Mobile-Friendly: Works seamlessly on desktops, tablets, and smartphones.

• Free and Instant: No sign-up required, with results in seconds.

Estimate your end-of-service benefits today with our Gratuity Calculator UAE!

Gratuity Calculator Dubai is a free, easy-to-use tool designed to help employees and HR professionals in Dubai, UAE, calculate end-of-service benefits (gratuity) based on the UAE Labour Law and Dubai-specific regulations, including free zones like DIFC and JAFZA. Whether you’re resigning, being terminated, or planning HR compliance, this calculator provides accurate estimates of your gratuity entitlement.