UAE Gratuity Calculator 2026

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...

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...