How this calculator works
The calculator uses the same formula explained in detail in our step-by-step calculation guide:
- Your daily wage is your basic monthly salary ÷ 30.
- For each of your first 5 years of service, you accrue 21 days' pay.
- For each year beyond 5, you accrue 30 days' pay.
- Partial final years are calculated pro-rata based on completed months.
- Total gratuity is capped at 2 years' total salary.
- Service of less than 1 year generally has no entitlement.
UAE gratuity is calculated on your basic salary alone — not your total package including housing, transport, or other allowances. If you're not sure what your basic salary is, check your employment contract or the breakdown on your payslip. Read more in our complete gratuity guide.
What to do with your gratuity once you receive it
For most expats, gratuity is the single largest lump sum they'll receive during their time in the Gulf — but on its own, it's rarely enough to fund retirement. Once you have an estimate, it's worth thinking ahead about how that money could work for you rather than sitting in a low-interest account. Our guide on what to do with your gratuity walks through investment frameworks for putting a lump sum to work, and our best investment platforms for Gulf expats guide compares the main options.
Sarwa offers diversified, low-minimum portfolios built for Gulf residents — a simple way to start putting a gratuity lump sum to work.
Frequently asked questions
It gives a close estimate for most standard private-sector contracts under current UAE labour law. However, free zones, government entities, and older contract types can have specific variations, and items like unpaid leave or outstanding loans can change your final settlement figure. Treat the result as a starting point and confirm the exact number with your HR department.
Under the UAE Labour Law reforms (Federal Decree-Law No. 33 of 2021), gratuity is now calculated the same way regardless of whether you resign or are terminated, for most cases. This calculator assumes the standard full entitlement applies. See our complete gratuity guide for the situations that can still reduce or eliminate your gratuity.
Generally, employees with less than one year of continuous service are not entitled to gratuity. The calculator will flag this if your selected dates span less than 12 months.
UAE labour law caps total gratuity at two years' worth of total salary. In practice this rarely affects expat tenures of under ~15-20 years at typical salary levels, but the calculator applies the cap automatically using your basic salary as a reference point.