Gratuity Calculator

Gratuity Calculator 2025 UAE

The Gratuity Calculator is a tool used to calculate the end-of-service benefit provided to an employee for their services rendered to the company. The amount of gratuity offered is determined by the employee's monthly basic salary and is generally paid upon termination, resignation, or the end of the employment contract. Employees who have worked with the company for over a year are usually eligible for this benefit, an essential part of their overall compensation package. However, the terms and conditions of the organization may allow employees to avail themselves of this benefit before the end of their service.

Calculate Your Gratuity

Last Basic Salary

AED

First Working Date

Last Working Date

You Should Receive

approx.

AED

Basic Salary

Working Years

Eligibility Criteria for Gratuity

To be eligible for gratuity in the UAE, an employee must meet the following conditions:

Continuous Employment: The employee must have worked continuously for at least one year with the same employer.
Valid Employment Contract: The employee must have a valid employment contract with their employer.
Type of Termination: Gratuity is applicable in cases where employment ends due to resignation, retirement, or termination by the employer, provided it is not due to serious misconduct.
Conduct: Employees must not have committed any serious misconduct that led to termination.
Contract Duration: Employees under a limited-term contract of less than one year are not eligible for gratuity.
Nationality: Both UAE nationals and expatriates are eligible for gratuity.

What Factors Are Considered When Calculating Gratuity?

The calculation of gratuity in the UAE is based on several factors, including:

1. Basic Salary

Gratuity is calculated on the basic salary only. This excludes any allowances, bonuses, or additional benefits.

2. Length of Service

The duration of employment plays a crucial role. According to UAE labor law:

For the first five years, employees are entitled to 21 days of basic salary per year.
For each additional year beyond five years, employees are entitled to 30 days of basic salary per year.

3. Reason for Termination

The reason for termination also affects gratuity eligibility. Termination due to misconduct can result in loss of gratuity entitlement.

How to Use the Gratuity Calculator

1. Determine Your Basic Salary

Calculate the total number of years and months you've worked.

2. Determine Your Length of Service

Refer to your employment contract or pay slip to find your basic salary.

Example: 3 years and 8 months = 3.8 years.

3. Input Details into the Calculator

Enter your basic salary and length of service.

4. Calculate Gratuity

Click the “Calculate” button to view the gratuity amount.

5. Review Your Results

The calculator will display the gratuity amount based on UAE labor laws.

How to Calculate Gratuity for Limited Contract in UAE

1. Duration of Service: Less than 1 Year

If you leave before completing one year of service, you are not entitled to any gratuity or final settlement.

2. Duration of Service: 1 – 5 Years

Example:

Basic Salary: AED 5,000
Total Years Worked: 2 years

Formula:

Basic Salary × 12 (months) / 365 (days) × 21 × 2 (years)

Note: This is a simplified example. The actual amount may vary based on the employment contract terms between the employee and employer.

3. Duration of Service: More Than 5 Years

For employees with over 5 years of service, the End of Service Benefit (EOSB) is calculated at a higher rate, generally:

Formula:

Basic Salary × 12 (months) / 365 (days) × 21 × 2 (years)

Key Aspects to Consider Regarding Gratuity

Gratuity is calculated only on the basic salary.
Employers must not manipulate basic salary by increasing other allowances to reduce gratuity.
If eligible, any dues owed by the employee to the company can be deducted from the gratuity amount.
Employees with less than one year of service are not eligible for gratuity.
An employee may be disqualified from gratuity if they fail to perform essential duties.
Employees who cause material damage or loss to the company are not eligible for gratuity.

Disclaimer:

Please note that the Gratuity Calculator is provided for guidance only and does not have any legal basis . The results are based on typical scenarios under UAE Labor Law. only the gratuity component of the final settlement and does not account for:

Unused leave salary
Notice period compensation
Airfare
Other end-of-service entitlements

For precise calculations and legal interpretations, it is strongly advised to seek professional consultation. Dr. Job FZ LLC assumes no responsibility for errors or omissions in the use of this calculator.

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Common Doubts & FAQs

Is the end of service gratuity calculated according to the basic or total salary?

The end of service gratuity shall be calculated on the last due basic wage of the employee.

How is gratuity calculated in UAE?

The end-of-service gratuity shall be calculated on 21 days for each year for each employee who completed work with the employer for a period exceeding one year and to complete the fifth year, and thirty days for the following period, provided that the total wage did not exceed 24 months.

What is the biggest change in gratuity calculation with the new law?

The earlier law had a different gratuity calculation for limited and unlimited contracts. As per the new labor Law, all contracts are limited and hence gratuity is calculated on 21 days of basic salary for every year of service completed, up to five years. Post completion of five years of service, gratuity is calculated on 30 days for every year thereon.

If I resign when I still have the old, unlimited contract, how will my gratuity be calculated?

Any resignation or termination which will take place or took place after the new law came into effect will have the Articles of the new law applied.

Can a company hold gratuity in UAE?

Payment of end-of-service gratuity is not optional and under the UAE labour law, all employers are legally required to pay what is owed to a departing employee.