UAE Gratuity Calculator 2026

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 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 ...