UAE Gratuity Calculator Guide: Formula and Worked Examples

By JobSahar Team. Last checked: Oct 31, 2026

Key takeaways

• You get gratuity only after at least 1 year of continuous service.
• It is based on your basic salary, not allowances such as housing or transport.
• You get 21 days' basic pay for each of the first 5 years, and 30 days for each year after that.
• Part years count, once you have finished 1 full year.
• The total cannot be more than 2 years' wage. It must be paid within 14 days of the job ending.

Gratuity is the end-of-service benefit a private sector employer in the UAE pays a foreign worker when the job ends. It can be a large amount. So it is worth knowing how to check it.

This guide follows Article 51 of the UAE Labour Law (Federal Decree-Law No. 33 of 2021) and the official u.ae portal. It applies to full-time foreign workers in the private sector. Some free zones have their own employment rules.

Who gets gratuity?

Under Article 51, a full-time foreign worker gets gratuity if he or she has completed at least 1 year of continuous service.

• Less than 1 year: no gratuity.
• Unpaid leave: unpaid days of absence are not counted in your service.
• UAE nationals: they are covered by the pensions and social security law instead.

The u.ae portal adds:

• Part-time workers get gratuity in proportion to the hours they work (Article 30 of Cabinet Resolution No. 1 of 2022).
• Temporary work of less than 1 year does not earn gratuity.

The gratuity formula

Article 51 sets the formula:

• 21 days of basic wage for each year of the first 5 years
• 30 days of basic wage for each year after 5 years
• Part of a year is paid in proportion, if you have completed 1 year

Gratuity uses your last basic wage. Allowances such as housing and transport are not included.

Step 1: Find your daily basic wage

The Labour Law (Article 67) counts a month as 30 days. So:

Daily basic wage = monthly basic salary ÷ 30

Step 2: Count your gratuity days

• Years 1 to 5: years × 21
• Years after 5: extra years × 30

Step 3: Multiply

Gratuity = gratuity days × daily basic wage

Step 4: Check the cap

The total gratuity cannot be more than 2 years' wage. For a monthly basic salary, that is about 24 × your basic salary.

Basic salary vs total salary

Many UAE contracts split pay into parts. For example:

• Basic salary: AED 1,500
• Housing allowance: AED 600
• Transport allowance: AED 300
• Total salary: AED 2,400

Your gratuity uses only the basic part, AED 1,500. It does not use the total of AED 2,400.

This makes a big difference. After 3 years, gratuity on AED 1,500 basic is AED 3,150 (see Example 1 below). If it were based on AED 2,400, it would be AED 5,040. So always check the basic salary on your offer letter and contract before you sign.

Worked examples

We used code to check every number below. All salaries are monthly basic salaries.

Example 1: 3 years, basic AED 1,500

• Daily basic wage: 1,500 ÷ 30 = AED 50
• Gratuity days: 3 × 21 = 63 days
• Gratuity: 63 × 50 = AED 3,150

Example 2: 1 year 4 months, basic AED 3,000

• Daily basic wage: 3,000 ÷ 30 = AED 100
• Service: 1 year + 4/12 of a year = 1.333 years
• Gratuity days: 1.333 × 21 = 28 days
• Gratuity: 28 × 100 = AED 2,800

The extra 4 months count because the worker finished 1 full year.

Example 3: exactly 5 years, basic AED 4,500

• Daily basic wage: 4,500 ÷ 30 = AED 150
• Gratuity days: 5 × 21 = 105 days
• Gratuity: 105 × 150 = AED 15,750

Example 4: 7 years 6 months, basic AED 2,400

• Daily basic wage: 2,400 ÷ 30 = AED 80
• First 5 years: 5 × 21 = 105 days
• Next 2.5 years: 2.5 × 30 = 75 days
• Total days: 180
• Gratuity: 180 × 80 = AED 14,400

Example 5: 30 years, basic AED 2,000 (the cap applies)

• Daily basic wage: 2,000 ÷ 30 = AED 66.67
• First 5 years: 105 days
• Next 25 years: 25 × 30 = 750 days
• Total days: 855
• Before cap: 855 × 66.67 = AED 57,000
• Cap: 24 × 2,000 = AED 48,000
• Gratuity: AED 48,000

The cap only matters after very long service. With these rules, it starts to apply after about 25 and a half years of service.

Quick table: gratuity days by years of service

Years of service	Gratuity days
Under 1 year	0
1 year	21
2 years	42
3 years	63
5 years	105
10 years	255
15 years	405
20 years	555

Multiply the days by your daily basic wage. Remember the 2-year cap.

What can reduce your gratuity?

• Unpaid leave. Unpaid days of absence do not count as service.
• Money you owe. Article 51 lets the employer deduct amounts payable under the law or a court judgment. This must follow the rules in the Implementing Regulation.
• A low basic salary. Some contracts set basic pay low and allowances high. Your gratuity follows basic pay only, so check your contract.

Your employer may not keep your passport or other official documents to force a settlement (Article 13).

When must gratuity be paid?

Article 53 says wages and all dues must be paid within 14 days of the contract ending. The u.ae portal says the same for gratuity.

The optional savings scheme

The UAE has an optional savings scheme for end-of-service benefits (Cabinet Resolution No. 96 of 2023 and Ministerial Resolution No. 668 of 2023). Employers who join pay a monthly amount into an investment fund instead of the usual gratuity.

According to u.ae, the employer pays:

• 5.83% of the monthly basic wage for workers with less than 5 years of service
• 8.33% of the monthly basic wage for workers with 5 years or more

Ask your HR team if your company uses this scheme.

If your employer does not pay

1. Ask HR in writing for a gratuity breakdown.
2. Check it against the formula above.
3. If you disagree, contact MOHRE. Under Article 54, labour disputes go to MOHRE first.

MOHRE call centre: 600590000 or ask@mohre.gov.ae.

Thinking about your next job? See UAE jobs, the latest jobs and our other guides, including the UAE work visa steps.

Legal note: This guide is general information, not legal advice. Your contract, free zone rules or a court decision may change your result. Ask MOHRE about your own case.

Official sources

• u.ae: End of service benefits for employees in the private sector
• Federal Decree-Law No. 33 of 2021 (English text, u.ae)
• MOHRE: Contact us