UAE Gratuity Calculator 2026

When your employment in the UAE ends, whether through resignation, termination, or contract expiry, your employer must pay your wages and all your other entitlements, including gratuity, within 14 days of the end of the contract term. In practice, final settlements are often prepared quickly, sometimes by HR staff juggling multiple exits at once, and errors are more common than most employees realize. Once you sign your final settlement, it can become harder to dispute later. That makes the moment before signing one of the most important, and most overlooked, steps in the entire end-of-service process. This guide walks through exactly what to check before you put your signature on that document. What Should Be Included in Your Final Settlement? A complete UAE final settlement typically includes several components, not just gratuity: End of service gratuity: calculated on your last basic salary and your years of service. Unpaid or outstanding salary: for any days worked in y...

If you're employed under what's known as an "unlimited contract" in the UAE, calculating your end-of-service gratuity involves understanding both the current rules and a bit of legal history. Unlimited contracts have changed significantly in recent years, and a transition rule in the current law means your payout may depend on how your employer applies it. What Is an Unlimited Contract, and Does It Still Exist? An unlimited contract was traditionally an open-ended employment agreement with no fixed end date, historically common across the UAE private sector under the old Federal Law No. 8 of 1980. The current law, Federal Decree-Law No. 33 of 2021, which took effect on 2 February 2022, requires employers to convert contracts of undefined term into fixed-term contracts within one year of its taking effect, and the Minister may extend that period. If you still hold documentation referring to an "unlimited contract," it's worth confirming with HR or MOH...

Fixed-term contracts in the UAE typically run for up to three years, and most employees plan to see theirs through. But life doesn't always cooperate — a better offer, a family move, or simply an unworkable situation can mean resigning before your contract officially ends. If that's you, the good news is your gratuity isn't wiped out. But there are a few things that work differently when you leave early, and getting them wrong can cost you money or create visa complications. The Basic Rules of UAE Gratuity Calculation Your end-of-service gratuity is calculated based on your Basic Salary only. Any allowances you receive for housing, transport, or utilities are excluded from this calculation. The duration of your service determines the number of days' salary you receive for each year worked: Service Between 1 and 5 Years: You're entitled to 21 days of basic salary for each year of service. Service More Than 5 Years: You're entitled to 30 days of basic s...

If you're working in the United Arab Emirates (UAE), understanding how your end-of-service gratuity is calculated is very important. Gratuity is a monetary loyalty benefit paid by the employer to an employee upon completion of their employment contract. Under the UAE Labour Law, the calculation depends primarily on your basic salary and the total number of years you have served in the company. This guide breaks the formula down step by step so you can estimate your entitlement with confidence. 1. Basic Salary Is Key It's a common misconception that gratuity is calculated on your total salary. In reality, it's calculated on your basic salary only, excluding allowances like housing, transport, or medical insurance. If your monthly package lists a combined figure, you'll need to identify the basic salary component specifically from your labour contract before you can calculate anything accurately. 2. Service Less Than 1 Year If an employee resigns or is terminated...

Until early 2022, resigning early from a UAE job could cost you a big chunk of your end-of-service gratuity. That penalty is gone now, but plenty of people, and even some HR departments, are still working off the old rules. This article explains what changed, why it changed, and what the law says today, so you know which version of the rules genuinely applies to you. The Old Rule (No Longer in Effect) Previously, employees on unlimited contracts who resigned voluntarily before completing five years of service received a reduced gratuity, sometimes as little as one-third of the full entitlement if they left within the first three years. This penalty encouraged people to stay in jobs longer than they wanted, purely to protect their end-of-service benefits. What the Law Says Now The reform, Federal Decree-Law No. 33 of 2021, replaced unlimited contracts with fixed-term contracts, which can be renewed by agreement. Its provision on end-of-service benefits grants gratuity to a full-...

One of the most common questions UAE expats ask before leaving a job is whether their end-of-service gratuity is calculated on their full salary package or just a part of it. The answer under UAE Labour Law is clear: gratuity is calculated on your basic salary , not your total monthly package. This distinction catches a lot of people off guard, especially when their offer letter or payslip lists a much bigger "total" figure. This guide explains what counts, what doesn't, why the difference exists, and how to work out your real number before you sign anything. Basic Salary vs. Total Salary: What's the Difference? Most UAE employment packages are split into several components. Your total salary (sometimes called your "gross" or "package" salary) is everything you receive each month combined. Your basic salary is only the core, fixed component stated in your labour contract, and the law defines it as the contractual wage excluding allowances. It...

If you're working in the UAE under a limited (fixed-term) contract, knowing exactly how your end-of-service gratuity is calculated can save you from a nasty surprise when your contract ends. Since the UAE's labour reforms phased out unlimited contracts in favour of fixed-term agreements, the calculation rules have become more standardized — but they're still widely misunderstood. This guide breaks down eligibility, the exact formula, worked examples, the legal payout cap, and the most common mistakes employees make. What Is a Limited (Fixed-Term) Contract? A limited contract is an employment agreement with a defined start and end date that can be renewed by agreement, under current UAE Labour Law (Federal Decree-Law No. 33 of 2021). The law required employers to convert previously unlimited contracts into fixed-term contracts within a year of it taking effect in February 2022 (the Minister may extend that period), so the vast majority of private-sector employees in the ...

100% Free to use 2026 Law updated 🧮 UAE Gratuity Calculator 2026 Based on Federal Decree-Law No. 33 of 2021 Basic Salary (AED per month) First Working Day Last Working Day Unpaid Leave Days (if any) Resignation and termination are calculated the same way under the current law, so no extra selection is needed. Calculate My Gratuity → Calculation Summary ✅ UAE Labour Law 2026 Compliant 🔒 No Data Stored ⚡ Instant Results 🆓 100% Free Forever Quick Navigation 📖 What Is Gratuity 📊 How It's Calculated 💵 What Counts as Basic Salary ✅ Who Qualifies 📝 Does Resignation Reduce It? 🏢 Free Zone Rules 💰 Alterna...