💰 UAE Gratuity Calculator 2026

Gratuity in UAE is calculated based on basic salary and years of service. For unlimited contracts: First 5 years receive 21 days of salary per year, and after 5 years you receive 30 days per year. For example, if your basic salary is AED 10,000 and you worked 6 years, calculation is: (21 days × 5 years) + (30 days × 1 year) = 135 days. Daily wage = 10,000 ÷ 30 = AED 333.33. Total gratuity = 135 × 333.33 = AED 45,000. Limited contracts follow different rules based on resignation or completion.

Gratuity is calculated ONLY on basic salary, not total package. It excludes housing allowance, transportation allowance, phone allowance, bonuses, commissions, and other benefits. However, some employment contracts structure allowances as part of basic salary. For example, Contract A: Basic AED 8,000 + Housing AED 2,000 = Gratuity on AED 8,000. Contract B: Basic AED 10,000 (all-inclusive) = Gratuity on AED 10,000. Always check your contract to see what's included in "basic salary" for gratuity calculation purposes.

For unlimited contracts, NO - you receive zero gratuity if you resign before completing 1 year of service. For limited contracts, you also receive nothing if you resign before 1 year. However, if you're terminated by employer (not for misconduct), you may be entitled to gratuity even before 1 year, calculated pro-rata. After completing 1 year on unlimited contract and resigning between 1-3 years, you receive only 33% of calculated gratuity. Between 3-5 years = 66%. Only after 5 years do you receive full 100% gratuity upon resignation.

Unlimited contracts have graduated gratuity: 21 days/year for first 5 years, then 30 days/year after. If you resign before 5 years, you receive reduced gratuity (33% at 1-3 years, 66% at 3-5 years). Limited contracts are simpler: If you resign early, 21 days per year for all years. If you complete contract or are terminated, 30 days per year for all years. Limited contracts don't have the 33%/66% reduction penalties. Example: 3 years service, AED 10,000 basic, resignation. Unlimited = 21 days × 3 years × 66% = 41.58 days = AED 13,860. Limited = 21 days × 3 years = 63 days = AED 21,000.

According to UAE Labour Law, employers must pay gratuity within 14 days from the employee's last working day. This deadline applies whether you resigned, were terminated, or contract completed. Payment can be made via: bank transfer to your account, manager's cheque, or cash (less common). If employer delays beyond 14 days without valid reason, you can file complaint with Ministry of Human Resources & Emiratisation (MOHRE). Keep documentation: resignation letter, acceptance, last working day confirmation. Some companies pay with final salary, others separately. Always follow up if payment delayed beyond 14 days.

Employers CANNOT arbitrarily deduct from gratuity. Legal deductions are only allowed for: Outstanding loans from employer (if agreement signed), Damages to company property (if proven and documented), Court-ordered payments, Amounts specified in valid settlement agreements. Employer cannot deduct for: Notice period shortfall (separate penalty), Lost equipment without proof, Training costs (unless contract allows), General "damages" without evidence. If employer makes unauthorized deductions, file complaint with MOHRE immediately. Keep your employment contract, salary certificates, and correspondence as evidence. Gratuity is a legal right protected by UAE Labour Law.

After exactly 5 years on unlimited contract, you receive 21 days per year for all 5 years = 105 days of salary. Example calculations: Basic AED 5,000: 105 days × (5,000 ÷ 30) = AED 17,500. Basic AED 8,000: 105 days × (8,000 ÷ 30) = AED 28,000. Basic AED 10,000: 105 days × (10,000 ÷ 30) = AED 35,000. Basic AED 15,000: 105 days × (15,000 ÷ 30) = AED 52,500. Basic AED 20,000: 105 days × (20,000 ÷ 30) = AED 70,000. If you resign after 5 years, you receive 100% of this amount. If you continue working, years 6+ earn 30 days per year instead of 21.

Yes, UAE Labour Law caps maximum gratuity at 2 years of basic salary, regardless of how many years you worked. For example, if basic salary is AED 10,000, maximum gratuity = AED 10,000 × 24 months = AED 240,000. This cap is typically reached after working approximately 15-17 years. Calculation: First 5 years = 105 days, Next 10 years = 300 days, Total = 405 days = 13.5 months. You'd need to work about 15+ years to hit the 24-month cap. Most employees don't reach this limit as they change jobs before 15 years. The cap protects employers from excessive payouts for very long-serving employees.