🇦🇪 UAE End-of-Service Gratuity Calculator

Calculate your UAE end-of-service gratuity under Federal Decree 33/2021. Handles new law, old unlimited and old limited contracts, resignation reductions, statutory cap, year-by-year breakdown, and what-if "what if I stayed longer?" projections.

What is UAE End-of-Service Gratuity Calculator?

Built for UAE expats facing the most consequential financial calculation of their working life — the gratuity entitlement on resignation or termination. Implements the current law (Federal Decree-Law No. 33 of 2021, Article 51) which became effective 2 February 2022: 21 days basic salary per year for the first 5 years of service, 30 days basic salary per year beyond 5, capped at 24 months of basic salary, with a minimum 1-year service requirement. Daily wage is correctly computed as basic monthly ÷ 30 (the MOHRE convention). Critically, only the <strong>basic</strong> wage counts — not the gross — and most online calculators get this wrong. The tool also covers pre-Feb 2022 old-law cases (unlimited and limited contracts with their respective resignation-reduction tables) for residual disputes still being settled, deducts unpaid-leave days from the service period, applies the statutory cap with a clear warning when it bites, and projects "what if I stayed an extra 6 / 12 / 24 / 60 months" so you can see exactly what each additional period of service is worth in cash. Free-zone note: DIFC and ADGM are excluded from the federal law and run their own schemes (DEWS in DIFC).

How to Use

  1. Enter your start date (the date you joined the company) and last working day
  2. Enter your basic monthly salary in AED — this is the BASIC component on your contract / payslip / WPS, NOT your gross. Allowances do not count
  3. Pick your contract type: most contracts today are New Law (post-Feb 2022); pick Old Unlimited or Old Limited only for pre-Feb 2022 disputes
  4. Pick how the employment is ending — resignation, termination, contract completed, or mutual agreement (matters under old law only)
  5. See your gratuity headline, the 21-day / 30-day tier breakdown, the year-by-year accrual chart, and "what if you stayed longer" projections

How UAE end-of-service gratuity is actually calculated

The current rules sit in Article 51 of Federal Decree-Law No. 33 of 2021, in force since 2 February 2022. The formula has three pieces:

  1. Daily wage = basic monthly salary ÷ 30. UAE convention treats every month as 30 days regardless of actual length, so a 31-day or 28-day month does not change the daily figure.
  2. Tier 1 (first 5 years) = 21 days × daily wage × min(serviceYears, 5). For someone on AED 8,000 basic monthly serving 4 years, that is 21 × (8000/30) × 4 = AED 22,400.
  3. Tier 2 (years beyond 5) = 30 days × daily wage × max(0, serviceYears − 5). Same person serving 10 years instead: tier 1 stays at AED 28,000 (21 × daily × 5), tier 2 adds 30 × daily × 5 = AED 40,000, total AED 68,000.

Then two adjustments:

  • Pro-rata for partial years: after the first complete year, fractions of a year are calculated proportionally. A 6-year-and-4-month tenure earns the full first 5 years at 21 days plus 1.33 years × 30 days for the part beyond.
  • Statutory cap (Art 51(7)): total gratuity is capped at 24 months of basic salary (2 years' wage), no matter how long the service. For long tenures with small basic salaries this rarely bites, but for 35+ year careers in stable industries the cap is real.

The minimum eligibility threshold is 1 year of continuous service. Below that, no gratuity is owed by law (though some employers pay it as goodwill).

Basic vs gross — the most expensive mistake

Roughly half of the gratuity disputes that end up at MOHRE arbitrate one issue: which "salary" the employer used. UAE law is unambiguous — it is the basic wage as defined in Federal Decree 33/2021 and the labour-law definitions, which means the contractual basic component, not the total compensation.

Why does this matter? On a typical Dubai package of AED 25,000 gross / month, the basic might be AED 12,000–15,000 and the rest is housing, transport, schooling, telecom, and food allowances. After 5 years on that package, the gratuity differs dramatically:

  • If calculated on AED 25,000 (incorrect): 5 × 21/30 × 25,000 = AED 87,500
  • If calculated on AED 12,000 (correct, Basic only): 5 × 21/30 × 12,000 = AED 42,000

That is a AED 45,500 gap on a single 5-year settlement. Many HR systems intentionally or unintentionally compute on basic only; some employees expect gross because the "salary" they signed for was the gross. Both are right in their own framing; only basic is what the law mandates.

To find your basic figure: check your offer letter or contract for the "Basic Salary" line item, or look at your WPS-recorded pay. If the contract has only one number with no breakdown, that whole number is the basic — but check carefully because some employers verbally agree to a gross figure but contract on basic-only to reduce gratuity exposure later.

Old law vs new law — when each applies

Federal Decree 33/2021 came into force on 2 February 2022. On that day, all unlimited-term contracts under the previous Federal Law No. 8 of 1980 were automatically converted to fixed-term (limited) contracts of up to 3 years under the new framework. The implications for gratuity:

  • For employment ending after 2 Feb 2022 with service entirely after that date: pick Current law. Full gratuity regardless of resignation, with the 21-day / 30-day / cap rules above.
  • For service spanning the cutover: in practice MOHRE and most lawyers apply the new-law calculation across the entire service period, including the pre-2022 portion. The old-law reduction rules (1/3, 2/3 etc.) are no longer applied prospectively. Use Current law.
  • For disputes arising from employment that ended before 2 Feb 2022: the old law applies. Pick Old unlimited or Old limited depending on what your contract said.

Old law unlimited resignation table

  • 1–3 years served: 1/3 of standard gratuity
  • 3–5 years served: 2/3 of standard gratuity
  • 5+ years served: full gratuity
  • Any service period if terminated by employer: full gratuity

Old law limited (fixed-term) resignation

  • Resignation before completing the contract (or at minimum 5 years): forfeits all gratuity, and the employee may also owe up to 45 days' wage as compensation under the old Article 116
  • Termination by employer before contract end: full gratuity plus compensation for the remaining contract period
  • Contract completed naturally: full gratuity

The new law abolished both reduction tables. As of 2 Feb 2022, an employee who resigns after 1 year, regardless of contract duration or employer's wishes, is entitled to full gratuity per the standard formula.

Free zones, DEWS, and the public sector

Not every UAE employee is covered by Federal Decree 33/2021. Three carve-outs:

  • DIFC (Dubai International Financial Centre): runs its own employment law. Since 1 February 2020, all DIFC employers must contribute monthly to DEWS (DIFC Employee Workplace Savings) — a defined-contribution scheme paid into a managed fund. The employee receives the accumulated pot at exit instead of a calculated gratuity. The contribution rate is 5.83% for service under 5 years and 8.33% beyond, applied to monthly basic salary. Returns are market-driven (the fund is managed). DEWS is portable and vests immediately, so DIFC employees actually have stronger protections than mainland counterparts.
  • ADGM (Abu Dhabi Global Market): also operates its own employment regime, currently still using a traditional calculation similar to the federal law but governed by ADGM regulations directly. Confirm with your ADGM employer's HR.
  • UAE nationals (Emiratis) in public or private sector: covered by the federal pension and social-security scheme run by GPSSA (Abu Dhabi) or Sharjah/Dubai equivalents. Gratuity does not apply; pension contributions and benefits replace it. This calculator is for expat (foreign national) employees.

For most readers — expat employees on the mainland, in DMCC, JAFZA, KIZAD, Dubai South, RAKEZ, Sharjah free zones, etc. — Federal Decree 33/2021 applies and this calculator works as intended.

Frequently Asked Questions

Should I use my basic salary or my gross?

Basic only. UAE Federal Decree 33/2021 explicitly defines gratuity as a function of basic wage, not total compensation. Your contract or payslip has a Basic line item — that is the figure to enter. Housing, transport, telecom, and other allowances are excluded. This is the single most common mistake on online calculators (and HR settlements) — using gross overstates entitlement by 30–60%.

Does the new law apply to my old unlimited contract?

Yes. When Federal Decree 33/2021 came into force on 2 February 2022, all unlimited contracts were automatically converted to fixed-term contracts under the new law. For service periods spanning the cutover, the post-cutover service is calculated under the new law. For settlements relating to disputes from before that date, the old-law tables (1/3 / 2/3 / full) may still apply — pick "Old law — Unlimited" or "Old law — Limited" if your case is in that category.

What is the difference between resignation and termination under the new law?

Practically nothing for gratuity. Federal Decree 33/2021 made gratuity payable on full terms regardless of who initiates the end of employment, as long as the minimum 1-year service requirement is met and the employee was not dismissed for an Article 44 disciplinary reason (gross misconduct, fraud, etc.). The old law's 1/3 / 2/3 / full reduction for resignation only applies to pre-Feb 2022 disputes.

Why does the calculator say "no gratuity" for less than 1 year?

UAE labour law requires a minimum of 1 year continuous service for gratuity entitlement. Anything less and there is no statutory gratuity. Some employers offer gratuity below 1 year as a contractual goodwill payment, but that is not legally required.

What is the 24-month cap?

Article 51(7) of Federal Decree 33/2021 caps total gratuity at 2 years' basic wage (24 × basic monthly salary), no matter how long you have served. This bites only at very long tenures — typically 30+ years for someone whose salary has not grown substantially. The calculator flags it explicitly when applicable so you understand why your "raw" calculation differs from your "final" entitlement.

How are unpaid leave days handled?

They reduce your service period day-for-day. Enter the total unpaid-leave days you took during your tenure (not paid annual leave, not sick leave within entitlement) and the calculator deducts them from the service days before computing the years.

I work in DIFC / ADGM — does this apply?

No. DIFC and ADGM are excluded from the federal labour law and have their own end-of-service schemes — DIFC has DEWS (DIFC Employee Workplace Savings) which is a defined-contribution scheme paid into a managed fund; ADGM has its own regime. Mainland and free-zone employees outside DIFC/ADGM (DMCC, JAFZA, KIZAD, etc.) follow Federal Decree 33/2021 and this calculator applies. Pick "Free zone" sector to see a reminder.

Is my data uploaded?

No. Everything runs in your browser; your dates and salary are stored only in your browser's localStorage. Nothing is transmitted. Refreshing the page keeps your last input, clearing your browser data wipes it.

Will MOHRE accept this calculation?

The numbers will match a MOHRE-compliant calculation if you have entered the basic salary correctly and the correct service period. MOHRE's online dispute filing accepts gratuity calculations as part of the case file. For the actual MOHRE submission, use the figures here as a reference and let your employer's final settlement go through their HR system. If the figures disagree with what HR pays, you have grounds to dispute it through MOHRE's 600 590 000 hotline or the Tasheel system.

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