Gratuity Calculator UAE 2025 : Fast and Precise Results

Gratuity Calculator UAE

A gratuity in Dubai and UAE is an end-of-service benefit paid to employees when they leave a job based on the length of their service. It is calculated according to UAE labor law and typically depends on the employee’s basic salary and years of employment.

Calculating gratuity manually can be complex and prone to errors. It requires understanding UAE labor laws, factoring in variables like your length of service, salary, and termination type, and applying the correct formulas. Missing even a small detail can lead to incorrect results.

How Do You Use This UAE Gratuity Calculator?

Here is an easy step-by-step guide for your gratuity computation:

First, select your contract type as limited or unlimited
Next, select the circumstances of end of service as termination or resignation
Then, enter your basic salary
Press calculate and get your gratuity computation in no time.

You don’t need formulas or complex calculations with our gratuity calculator—it handles everything for you.

This tool is useful if you’ve worked for more than one year, your termination is legal, and you have a good work record. Whether you’re in Abu Dhabi, Dubai, or anywhere in the UAE, it ensures you understand your end-of-service benefits—hassle-free.

Disclaimer

Our gratuity calculator is a helpful tool, not a legal one. It estimates your gratuity based on UAE labor laws and the details you provide. Factors like compensation during your tenure, employment agreement terms, or incomplete information can affect the results.
The calculator is not liable for errors and should not be used for legal purposes. For legal matters, we recommend consulting a lawyer.

Crucial Factors for Gratuity Calculation in UAE

Article 132 of the new UAE Labour Law 2024 explains the end-of-service benefits for full-time employees. If you’ve completed at least one year of continuous service, you’re entitled to a gratuity based on your last basic wage.

Eligibility Criteria:

The employee must complete at least one year of continuous service with the employer to qualify for gratuity.
Unpaid absences are not included when calculating the end of service benefits.

Your Gratuity Depends on your Contract type

Your contract type also impacts your gratuity calculations.

Limited Contract Type

According to Article 38, a limited contract may not exceed 4 years in duration. It can, however, be renewed or extended by mutual agreement between the employer and the employee. If renewed, the new term is considered an extension of the original period for calculating the employee’s total service duration.

According to Article 138, If your working period is between 1 – 5 years, you will get a salary of 21 days as a gratuity for each of the first 5 years.
If your service period is more than 5 years, you will get a salary of 21 days as gratuity for the first 5 years, and 30 days as gratuity for each year after the 5th year.
Your total gratuity cannot exceed the wage for 2 years.

Forfeiture of Gratuity:

According to Article 139 of the UAE labour law the gratuity is forfeited if:
The employee is dismissed for reasons specified under Article 120 (e.g., misconduct, fraud, etc.).
The employee resigns voluntarily before completing 5 years of service.

Renewals and Gratuity:

According to Article 38, If a limited contract is renewed, the subsequent period is treated as a continuation of the original term for the purpose of calculating gratuity and total service duration.

Unlimited Contract Type

An unlimited contract (indefinite term contract) is one without a specific duration, or where no written agreement specifies an end date (Article 39). It also applies if a limited contract continues without written renewal after its expiry, or if the work has no specific duration or is recurrent by nature (Article 39). Either party may terminate it with at least 30 days’ written notice (Article 117).

Employees under an unlimited contract must complete at least one year of continuous service to qualify for gratuity (Article 132).

In case of Termination:

By the Employer Without Cause:

If the employer terminates your employment without a valid reason (not under Article 120), you are entitled to:
Full gratuity for the years served, based on the standard calculation:
21 days’ basic pay for each year of the first 5 years.
30 days’ basic pay for each year beyond 5 years (Article 132).
Partial gratuity applies if your service period is less than 5 years (Article 137).
1–3 years: One-third of gratuity.
3–5 years: Two-thirds of gratuity (Article 137).

Dismissal for Valid Reasons (Article 120):

If terminated for reasons such as misconduct, fraud, or breaching workplace safety (as per Article 120), you forfeit your entire gratuity entitlement (Article 139).

In case of Resignation:

After Completing 1–5 Years of Service:
You will receive a partial gratuity:
1–3 years of service: One-third of your gratuity entitlement (Article 137).
3–5 years of service: Two-thirds of your gratuity entitlement (Article 137).
After Completing More Than 5 Years of Service:
You are entitled to the full gratuity for the years worked, based on the standard calculation (Articles 132 and 137).
Resignation Without Notice or Valid Reason:
If you resign without a valid reason under Article 121 or fail to serve the notice period, you may forfeit part or all of your gratuity, depending on your length of service (Article 139).
Resignation for Valid Reasons (Article 121):
If you resign because the employer violated the terms of the contract or failed to honour obligations, you are still entitled to gratuity as per your service period (Article 121).

Additional Terms and Conditions for Gratuity according to UAE Labor Law:

Gratuity Calculation Basis:

Gratuity is calculated based on the basic wage only and excludes:

Housing allowance.
Transport allowance.
Overtime pay.
Other bonuses or benefits according to(Article 134).

Severance Adjustments:
Employers can deduct amounts owed by the employee (e.g., loans, advances) from the gratuity payment (Article 135).

Legal Heirs:
In case of the worker’s death, gratuity is paid to their legal heirs (Article 136).

Continuous Service Requirement:
Breaks in service may disqualify an employee from gratuity unless these breaks are expressly approved by the employer (Article 132).

UAE gratuity calculation formula

Our UAE Gratuity Calculator gives you a quick and accurate estimate of your gratuity. For those interested in the manual calculation process, we’ve summarized the key guidelines and formulas below.

How To Calculate Gratuity In UAE For Limited Contract

If you are on a limited contract, you can calculate your estimated gratuity after completing your service period by this formula.

Divide your basic salary by 30 to get your per-day salary.

Basic Salary/30 = Per day salary
For instance, if your basic salary is 9,000 Dirhams,
9,000/30= Dh 300

Now, multiply your per day salary by 21 to get your 21 days` salary. It is your per-year gratuity.

Per day salary * 21= Per year Gratuity
300*21= Dh 6,300

If your service tenure is between 1 – 5 years, multiply your 21 days` salary by the number of years.

Per year gratuity * Service years = Gratuity
For 3 year contract,
6300*3= Dh 18,900

If your service tenure is more than 5 years, then multiply your basic monthly salary for the 5th year onwards.

For instance, if your service tenure is 7 years,
9000*2= Dh 18,000.
It will be your gratuity for the 6th and 7th year.

Your total gratuity will be the sum of the gratuity of the first 5 years and the gratuity of 5th year onwards.

Gratuity of first 5 years + Gratuity of 5th year onwards = Total Gratuity
18,900 + 18,000= Dh 36,900

How To Calculate Gratuity In UAE For Unlimited Contract

Your gratuity calculations will remain the same in case of termination in unlimited contract type. But if you have resigned from your job, add these steps to the gratuity calculation.

Divide your basic salary by 30 to get your per-day salary.

For Dh 9,000 basic salary,
9,000/30= Dh 300

Now, multiply your per day salary by 21 to get your 21 days` salary.

300*21= Dh 6,300

If your service tenure is between 1 to 3 years, calculate one-third of 21 days` salary

6300* 1/3 = Dh 2100
It is your per-year gratuity.

Now multiply this amount by your number of service years.

For instance, for 2 years
2100*2 = Dh 4200
It will be your gratuity amount.

If your service tenure is between 3 to 5 years, calculate two-thirds of 21 days` salary

6300* 2/3 = Dh 4,200
It is your per-year gratuity.

Now multiply this amount by your number of service years.

For instance, for 4 years:
4200*4 = Dh 16,800
It will be your gratuity amount.

If you resign after more than 5 years of service, your gratuity calculation will be the same as for a limited contract-type employee.

Common Mistakes to avoid while Using end of service calculator dubai

# 01 Interpretation of Salary

Mistake: I will get my gratuity on my total salary.

Clarification: Your gratuity is according to your basic salary. It excludes all allowances from your salary, like housing allowance, fuel, medical compensation, etc.

# 02 Calculation of Service Duration

Mistake: I will get my gratuity on the approximated duration of service.

Clarification: Your gratuity should be calculated based on the exact duration of your service tenure. There is no round-off thing when it comes to gratuity calculation.

# 03 Understanding Contract Type

Mistake: I will get the same gratuity per year of service regardless of my contract type.

Clarification: According to UAE Labor Laws, formulas of gratuity calculations are different for limited and unlimited contract-type jobs.To better understand the differences, see Limited vs Unlimited Contract UAE.

# 04 End of Service Benefits:

Mistake: Gratuity is the other name for end-of-service benefits.

Clarification: Your gratuity is just one component of your end-of-service benefit. There might be other benefits as well based on your job agreement.

# 05 Overgeneralization

Mistake: Gratuity is the same for everyone regardless of when they leave the job.

Clarification: The gratuity amount varies with the tenure of your service. You are not eligible for gratuity if your service period is less than one year.

Also See: domestic worker gratuity

Tips to Increase Gratuity

Thoroughly read and understand your job agreement, especially the gratuity policy of your company.
In case of a limited contract job, try to complete your service tenure to avoid any deductions.
If you are not satisfied with your job, resign at the time when you get maximum gratuity.
Keep a close eye on updates in UAE labor laws.
Use the gratuity calculator UAE to calculate your expected gratuity and then plan your resignation accordingly.

Our Gratuity Calculator UAE is a valuable tool for calculating your end-of-service benefits, helping you plan effectively for the end of your service. While it provides you helpful estimates, it may not account for specific factors that could influence the final calculation.

For the most accurate results, it’s a good idea to use tools like the Gratuity Calculator as a guide and consult a professional to ensure you maximize your benefits before making any final decisions.

Gratuity Calculator UAE 2025: Fast and Precise Results