Gratuity Calculator UAE

The Online Gratuity Calculator UAE calculates end-of-service benefits using your basic salary, service duration, and contract type. Enter your details for instant results, whether resigning or terminated, for limited or unlimited contracts. Employees receive 21 days’ salary annually for up to 5 years and 30 days beyond that, ensuring compliance with UAE labor law.

Are you leaving your job in the UAE and wondering how much gratuity you’re entitled to? Whether it’s a career change, retirement, or resignation, calculating gratuity can be challenging.

With different rules for limited and unlimited contracts, resignation, and termination, understanding your rights under UAE labor laws is crucial. A gratuity calculator simplifies this process, helping you get accurate estimates quickly and confidently.

What is Gratuity?

Gratuity (مكافأة) is a mandatory end-of-service payment given to employees in the UAE, including Dubai, by their employers. Under Federal Decree-Law No. 33 of 2021, gratuity ensures fair compensation for employees who have completed at least one year of continuous service. This payment is calculated based on the employee’s basic salary, service duration, and the terms of their employment contract—whether limited or unlimited.

What is Online Gratuity Calculator UAE?

A gratuity calculator is a tool that helps employees determine their end-of-service benefits under UAE labor laws. Employers in the UAE must pay gratuity to employees upon the conclusion of their contracts, as stated in Federal Decree-Law No. 33 of 2021.

This tool simplifies complex calculations by considering factors like your basic salary, years of service, and the reason for leaving your job. Gratuity payments are a critical part of labor rights in the UAE, offering employees financial security after years of service.

Why Use a Gratuity Calculator?

Calculating gratuity manually can be time-consuming and prone to errors. A gratuity calculator ensures accuracy, saves time, and helps employees understand their entitlements. Here’s why it matters:

1. Accurate Estimates: The calculator uses UAE labor law guidelines to provide exact gratuity amounts.
2. Saves Time: Instead of manually checking rules and performing calculations, the tool does it in seconds.
3. Prevents Disputes: Knowing the correct gratuity reduces misunderstandings between employees and employers.
4. Compliance: Employers can also use this tool to ensure compliance with legal requirements.

How Does Gratuity Work in the UAE?

Gratuity depends on three main factors:

1. Contract Type: Limited or unlimited.
2. Termination Reason: Resignation or employer-initiated termination.
3. Service Duration: Gratuity increases with more years of service.

Let’s break this down further:

1. Contract Types

• Limited Contract: Employees agree to work for a fixed term. Termination before completing the contract term can result in losing gratuity, depending on the circumstances.
• Unlimited Contract: Employees can resign anytime with proper notice. Gratuity may reduce if resignation occurs before completing five years of service.

2. Gratuity Payment Based on Years of Service

• Less than 1 Year:
  No gratuity is owed if the employee leaves within the first year.
  However, Article 51 of the UAE Labour Law states that employees are entitled to gratuity for fractions of a year if they complete at least one year of continuous service.
• 1 to 5 Years:
  Employees receive 21 days’ basic salary for each completed year.
• More than 5 Years:
  Employees earn 30 days’ basic salary for every year beyond the first five years.

Example Calculation:

Assume:

• Basic Salary: AED 12,000
• Service Duration: 7 years

Calculation:

• First 5 years: 12,000×2130×5=AED42,00012,000 \times \frac{21}{30} \times 5 = AED 42,00012,000×3021​×5=AED42,000
• Additional 2 years: 12,000×3030×2=AED24,00012,000 \times \frac{30}{30} \times 2 = AED 24,00012,000×3030​×2=AED24,000

Total Gratuity: AED 66,000

3. Termination vs. Resignation

• Termination: Employees receive full gratuity if terminated after completing at least one year of service.
• Resignation:
  • Under an unlimited contract, gratuity may reduce based on years of service:
    • Less than 3 years: One-third of full gratuity.
    • 3 to 5 years: Two-thirds of full gratuity.
    • More than 5 years: Full gratuity.
  • Under a limited contract, employees forfeit gratuity if they resign before the contract term ends, except in certain cases.

How to Use the UAE Gratuity Calculator Online in 2025?

Using the gratuity calculator is straightforward. You need to provide:

1. Basic Salary: Enter your last drawn monthly basic salary.
2. Start and End Dates: Specify your first and last working days.
3. Contract Type: Choose between limited and unlimited.
4. Reason for Leaving: Select resignation or termination.

The calculator uses this data to apply the correct formula, ensuring accurate results. It displays the total gratuity and a breakdown of payments based on service years.

Legal Framework

The UAE labor law ensures employees receive gratuity as fair compensation for their service. Key points include:

1. Federal Decree-Law No. 33 of 2021 governs gratuity payments.
2. Article 51 specifies that gratuity applies even for fractions of a year, provided employees complete one year of continuous service.
3. Article 44 states employees terminated for gross misconduct are not eligible for gratuity.
4. Gratuity applies to all full-time and part-time employees under standard contracts.

By adhering to these regulations, gratuity calculators help both employees and employers comply with the law.

Factors That Affect Gratuity

Several factors can influence gratuity payments:

Basic Salary Only:

• Allowances (housing, transport, etc.) are not included in the calculation.

Notice Period:

• Failing to provide proper notice can affect gratuity entitlement.

Misconduct:

• Serious violations may result in loss of gratuity under Article 44.

Contractual Clauses:

• Some contracts include additional clauses that can impact gratuity.

Benefits of a Gratuity Calculator

For Employees:

• Ensures you know your rights and entitlements.
• Helps in financial planning when switching jobs or retiring.

For Employers:

• Prevents legal disputes by offering transparency.
• Helps manage finances for end-of-service payouts.

Tips for Maximizing Your Gratuity

1. Complete Contract Terms: For limited contracts, finishing your contract period ensures full entitlement.
2. Serve Proper Notice: Resign with the required notice period to avoid deductions.
3. Keep Records: Maintain accurate records of your employment details.

Conclusion

The UAE Gratuity Calculator is an essential tool for understanding your end-of-service benefits. It simplifies the process, ensuring compliance with labor laws and giving employees a clear picture of their financial entitlements. Whether you’re an employee or employer, this tool saves time, provides accuracy, and reduces potential conflicts. Use it to plan your next steps with confidence.

Frequently Asked Questions

Q: Can I include overtime in the gratuity calculation?

No, gratuity calculations only consider your basic salary.

Q: What happens if I resign before completing a year?

Employees with less than one year of service are not eligible for gratuity.

Q: Are part-time employees eligible for gratuity?

Yes, gratuity for part-time employees is prorated based on hours worked.

Q: Does gratuity apply to all employees in the UAE?

Gratuity applies to all employees under the UAE Labor Law, regardless of their nationality.

Disclaimer:

GratuityCalculatorUAE.live offers a gratuity tool based on UAE labor law for informational purposes only. Results are estimates, not legally binding, and may vary by circumstances or policies. We are not liable for errors, omissions, or reliance on outcomes. For precise guidance, consult a legal advisor. Employment laws may change and affect calculations.