Gratuity Calculator UAE 2026: Dubai EOS Guide

MOHRE · UAE Labour Law 2026

Gratuity Calculator UAE

Estimate your end-of-service benefits (EOSB) in seconds.

Basic Monthly Salary (AED) Basic salary only — exclude housing, transport & allowances.

Contract Type

Reason for Leaving

First Working Day

Last Working Day

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If you are an expatriate employee working in Dubai or anywhere else in the UAE, your end of service gratuity is one of the largest lump sum payments you will ever receive from an employer. Getting the figure right before you resign or before your contract ends helps you plan your finances, negotiate your final settlement, and avoid disputes with HR.

This guide walks through exactly how UAE gratuity is calculated in 2026, who qualifies, and how to use a gratuity calculator UAE tool to get an instant estimate. You can run your own numbers using our free gratuity calculator, built specifically for employees in Dubai, Abu Dhabi, Sharjah, and the rest of the Emirates.

What Is Gratuity in the UAE?

Gratuity, also called end of service benefits (EOSB), is a mandatory lump sum payment that private sector employers in the UAE must pay to eligible employees when their employment ends. It exists to reward long-term service and give departing workers a financial cushion, similar to a severance or retirement payout in other countries.

The rules governing gratuity are set out in Federal Decree-Law No. 33 of 2021 (the UAE Labour Law), specifically Article 51, and are enforced by the Ministry of Human Resources and Emiratisation (MOHRE). According to the official UAE government portal, a full-time foreign worker who has completed at least one year of continuous service is entitled to end of service benefits calculated on their basic wage.

Who Is Eligible for a UAE Gratuity Calculator?

Before using an online gratuity calculator UAE, confirm you actually qualify. Eligibility generally works as follows:

Minimum service period: You must complete at least one full year of continuous employment with the same employer.
Expatriate employees: Both limited (fixed-term) and unlimited contract holders qualify, since the 2022 labour law reforms unified the rules for both contract types.
UAE nationals: Emirati employees are covered instead by the UAE’s pension and social security system, not the Article 51 gratuity formula.
Part-time and job-sharing staff: Gratuity is pro-rated based on contracted working hours compared to a full-time role.
Domestic workers: Nannies, drivers, and household staff are covered under separate domestic worker regulations but follow a broadly similar one-year eligibility principle.
Free zone employees: Most free zones follow the federal formula, but DIFC and ADGM operate their own separate employment frameworks (DIFC uses the DEWS savings scheme instead of traditional gratuity).

Unpaid absence days are excluded when your total service period is calculated, so keep your leave records accurate.

UAE Gratuity Calculation Formula (2026)

The formula is based on your basic salary only. Allowances such as housing, transport, and utilities are excluded, which is one of the most common mistakes people make when estimating gratuity manually.

Years of Service	Gratuity Formula
Less than 1 year	No gratuity entitlement
1 to 5 years	(Basic salary ÷ 30) × 21 days × number of years
Beyond 5 years	Add (Basic salary ÷ 30) × 30 days × each additional year
Total payout	Cannot exceed 2 years’ basic salary (the statutory cap)

Step-by-Step Calculation

Divide your basic monthly salary by 30 to get your daily wage.
Multiply the daily wage by 21 for each of the first five years of service.
For every year beyond five, multiply the daily wage by 30 instead.
Add both amounts together, then check the total against the two-year salary cap.

Worked Example

An employee earning a basic salary of AED 12,000 per month who has worked for 7 years would calculate gratuity as follows:

Daily wage: AED 12,000 ÷ 30 = AED 400
First 5 years: 400 × 21 × 5 = AED 42,000
Remaining 2 years: 400 × 30 × 2 = AED 24,000
Total gratuity: AED 66,000

Rather than doing this manually, you can plug your own basic salary and service dates into our gratuity calculator to get an instant, error-free result.

Maximum Gratuity Cap in the UAE

Regardless of how many years someone has worked, gratuity cannot exceed two years’ worth of basic salary. This cap is set by federal law and applies uniformly across Dubai, Abu Dhabi, Sharjah, and all other Emirates, whether the employer is in the private sector or a mainland-regulated free zone.

Resignation vs Termination: Does It Change Your Gratuity?

Under the current labour law, resignation and termination are treated the same way for gratuity purposes, provided the employee has completed at least one year of service and was not dismissed for gross misconduct under Article 120. This is a significant change from older UAE labour rules, which used to reduce gratuity for employees who resigned early from unlimited contracts. If you are unsure which rules apply to your contract type, it is worth reviewing your employment agreement or checking with your HR department before relying solely on an online estimate.

The Savings Scheme: An Alternative to Traditional Gratuity

MOHRE has introduced a voluntary Alternative End-of-Service Benefits Scheme, sometimes called the Savings Scheme, under Cabinet Resolution No. 96 of 2023. Instead of accruing a lump sum gratuity, employers enrolled in the scheme contribute a percentage of the employee’s basic salary each month (5.83% for staff with under 5 years of service, and 8.33% for those with more) into an approved investment fund regulated by the Securities and Commodities Authority. Participation is optional for both employers and employees, so check with your HR team whether your company has opted in, since this changes how your end of service benefit is structured.

Common Mistakes When Estimating Gratuity

Using gross salary instead of basic salary. Only your basic wage counts; commissions, bonuses, and allowances are excluded.
Rounding service periods incorrectly. Partial years matter. An employee with 4 years and 6 months of service is entitled to a proportionate benefit for the additional months, not just the full years.
Applying the wrong formula for years worked. The 21-day rate applies only to the first five years; everything beyond that uses the 30-day rate.
Forgetting the two-year salary cap. Even long-serving employees cannot receive more than 24 months of basic salary as gratuity.
Ignoring unpaid leave days. Days of unpaid absence are deducted from your total service period before gratuity is calculated.

What to Do If Your Gratuity Payment Is Delayed

UAE employers are legally required to settle all end of service dues, including gratuity, within 14 days of an employee’s last working day. If payment is late:

Send a written request to HR or management asking for a full settlement breakdown.
File a complaint through the MOHRE app or the MOHRE website if the issue is not resolved internally.
If mediation fails, MOHRE can issue a referral letter allowing the case to proceed to the Labour Court.

Once your final settlement lands, it is worth reviewing how you manage the payout. If you are paid through a UAE bank, checking your balance regularly, such as with an FAB balance check or NBAD balance inquiry, can help you confirm the transfer has cleared before you make any commitments based on the expected amount. Employees who plan to relocate within the UAE afterward may also want to review other Finance guides on managing prepaid cards, such as a prepaid card inquiry in the UAE, while settling into life in Dubai or another Emirate.

Frequently Asked Questions

How is gratuity calculated in the UAE?

Gratuity is calculated using 21 days of basic salary for each year of the first five years of service, and 30 days of basic salary for every year beyond that, capped at two years’ total basic salary.

Who is eligible for gratuity in the UAE?

Expatriate employees who complete at least one year of continuous service with the same employer are eligible. UAE nationals are instead covered by the country’s pension system rather than the Article 51 gratuity formula.

Is gratuity taxable in the UAE?

No. The UAE does not levy personal income tax, so gratuity payments are received in full, tax-free.

Do I get gratuity if I resign before five years?

Yes, as long as you have completed at least one year of continuous service. Under current labour law, resignation and termination are treated the same for gratuity purposes.

What is the maximum gratuity payout in the UAE?

The statutory cap is two years’ basic salary, regardless of how many years an employee has worked.

Does gratuity include housing or transport allowances?

No. Gratuity is calculated only on basic salary. Housing, transport, and other allowances are excluded from the calculation.

How long does an employer have to pay gratuity after I leave?

Employers must settle all end of service dues, including gratuity, within 14 days of the employee’s last working day.

Can my employer refuse to pay gratuity?

Gratuity can only be denied in cases of proven gross misconduct under Article 120 of the UAE Labour Law. Otherwise, it is a legal entitlement.

Conclusion

Understanding how a gratuity calculator UAE arrives at your final figure gives you confidence going into your final settlement conversation with HR, whether you are resigning, retiring, or being made redundant. The formula itself is straightforward once you know your basic salary and exact service dates, but small errors in rounding or using the wrong salary figure can lead to real discrepancies. Use our free gratuity calculator to get an instant, accurate estimate, and always cross-check the final amount with your employer or MOHRE before signing off on your end of service settlement.