UAE Gratuity Calculator
Estimate your end-of-service benefit under Article 51.
This is an estimate based on Article 51 of Federal Decree-Law No. 33 of 2021 for full-time expatriate employees. It does not account for Article 120 misconduct exclusions, DIFC/ADGM contracts, or domestic worker rules. For a matter involving a dispute or delayed payment, speak with our team.
UAE Gratuity Calculation: Formula, Rules & What to Do If You're Underpaid
If you're leaving a job in the UAE, whether by resignation or termination, gratuity is likely one of the biggest amounts you're owed. It's also where mistakes happen more than people expect. This guide walks through exactly how it's calculated under current UAE Labour Law, what's often gotten wrong, and what your options are if your employer doesn't pay it correctly.
What Is End-of-Service Gratuity?
Gratuity, formally called the end-of-service benefit, is a lump-sum payment owed to eligible employees when their employment ends, provided they've completed at least one year of continuous service. It applies regardless of whether you resigned or were terminated, and regardless of your contract type.
This comes from UAE Labour Law, Federal Decree-Law No. 33 of 2021, under Article 51.
The Gratuity Calculation Formula
The calculation is based entirely on your basic salary, not your total monthly pay. Housing allowance, transport allowance, and other benefits are excluded.
Daily wage is calculated as: basic monthly salary ÷ 30
Gratuity Calculation Example
Let's say your basic salary is AED 8,000, and you've worked for 7 years.
First 5 years → 21 days each = 105 days
Remaining 2 years → 30 days each = 60 days
Total eligible days = 165 days
AED 8,000 ÷ 30 = AED 266.67 per day
165 days × AED 266.67 = AED 44,000.55
So this employee would be entitled to roughly AED 44,000 in gratuity, separate from any unpaid salary, unused leave, or other final settlement items. If you are unsure about your entitlement, you can also use the UAE gratuity calculator above to estimate the amount before comparing it with your employer's final settlement.
What Doesn't Count Toward Your Service Period
This is where a lot of disputes actually start. Under Article 51(4) and Article 33(2), unpaid leave days are deducted from your total service period before gratuity is calculated. If you took unpaid leave at any point, that time doesn't count toward your years of service for gratuity purposes.
There's an important exception worth knowing: maternity leave and sick leave, even the unpaid portions, generally still count toward your service period. Only genuinely unpaid personal leave or unauthorized absence gets excluded. This distinction is frequently missed by employers doing their own final settlement calculations, and it's one of the more common sources of underpayment.
When You're Not Eligible
A few situations remove or affect gratuity eligibility:
- Less than one year of service - no gratuity is owed at all
- Termination for certain misconduct - An employee may be dismissed without notice in circumstances specified under Article 44 of the UAE Labour Law. Whether this affects an employee's end-of-service entitlement depends on the applicable legal provisions and circumstances of the termination.
- Domestic workers - covered under a separate framework (Federal Law No. 9 of 2022), with different calculation rules
The 14-Day Payment Rule
Under Article 53, your employer is legally required to pay your full and final settlement, including gratuity, unpaid salary, and unused leave, within 14 days of your last working day. This applies regardless of contract type, and the clock starts from your actual last working day, not your notice period or visa cancellation date.
If payment is late, your employer can face MOHRE penalties, including fines and, in repeated cases, restrictions on their ability to hire new employees.
A Newer Option: The Voluntary Savings Scheme
Since 2023, under Cabinet Resolution No. 96 of 2023, employers have had the option to enrol employees in an alternative savings scheme instead of the traditional lump-sum gratuity model. Under this scheme, monthly contributions are invested through approved funds, and the employee receives the accumulated amount plus returns at the end of their employment, rather than a one-time calculation based on final salary.
This is optional for employers, and if your company hasn't mentioned it, you're almost certainly still under the standard Article 51 gratuity structure described above.
A Note for DIFC and ADGM Employees
If you work for a company registered within the DIFC or ADGM free zones, this article doesn't apply to you directly, these zones operate under their own separate employment regulations, with different end-of-service calculation rules. If that's your situation, it's worth getting advice specific to your free zone's framework rather than assuming the standard UAE Labour Law calculation applies.
Steps to take If You Think You've Been Underpaid
If your final settlement doesn't match what you calculate here, a few steps before escalating:
- Request a written breakdown from HR showing exactly how your gratuity, leave encashment, and any deductions were calculated
- Check your basic salary figure against your MOHRE-registered contract, not your total monthly pay slip, since this is the single most common source of disagreement
- Review any deductions for unpaid leave against your actual leave records
- Don't sign a final settlement or cancellation document you're unsure about before the money has actually reached your account
If the disagreement isn't resolved directly with your employer, the next step is typically a complaint through MOHRE, which can investigate and, where necessary, refer the matter to the Labour Court.
When It's Worth Getting Legal Advice
Gratuity math itself is usually straightforward once you have the right inputs. Where it gets complicated, and where legal advice genuinely helps, is when:
- Your employer disputes the reason for your departure (affecting eligibility)
- There's disagreement over what counts as "basic salary" versus total compensation
- Unpaid leave deductions seem larger than they should be
- Payment has been delayed well past the 14-day window
- You're unsure whether an Article 120 misconduct claim against you is valid
Speak To a Labour Lawyer
At Alaa ElHoushy, our Labour laywer provide legal consultation on employment disputes in the UAE, including gratuity and final settlement disagreements. If your employer is disputing your entitlement, delaying payment, or you're unsure whether your calculation is correct, we review your contract, salary records, and the circumstances of your departure to explain your legal position clearly before you take further action.
Frequently Asked Questions
Is gratuity calculated on my total salary or just my basic salary?
Only your basic salary. Housing, transport, and other allowances are excluded from the calculation entirely.
Do I still get gratuity if I resign instead of getting terminated?
Yes. Under the current law, the reason for leaving doesn't affect your entitlement, as long as you've completed at least one year of continuous service.
Does unpaid leave affect my gratuity?
Yes, unpaid leave days are deducted from your total service period. Sick leave and maternity leave are generally treated differently and usually still count.
Is there a maximum amount of gratuity I can receive?
Yes, the total cannot exceed two years' worth of basic salary, regardless of how long you've worked.
How long does my employer have to pay my final settlement?
14 days from your last working day, under Article 53.
What happens if my employer refuses to pay or delays payment?
You can file a complaint with MOHRE, which can investigate and, if necessary, refer the matter to the Labour Court.
