Employment Guide2025 Update
UAE Gratuity Calculation Guide: Understanding Your End of Service Benefits
Master the art of calculating your UAE gratuity with our comprehensive guide. Learn about your entitlements, calculation methods, and factors affecting your end-of-service benefits.
Key Gratuity Facts
- ✓ Legal entitlement after 1 year of service
- ✓ Based on basic salary only
- ✓ Different rates for limited/unlimited contracts
- ✓ Tax-free benefit in the UAE
Basic Calculation Formula
| 1-5 Years | 21 days basic salary per year |
| 5+ Years | 30 days basic salary per year |
| Maximum Benefit | 2 years total salary |
| Partial Year | Prorated calculation |
Calculation Examples
Example 1: 3 Years Service
- • Basic Salary: AED 10,000
- • Daily Rate: AED 10,000 ÷ 30 = AED 333.33
- • Annual Gratuity: 21 days × AED 333.33 = AED 7,000
- • Total: 3 years × AED 7,000 = AED 21,000
Example 2: 7 Years Service
- • First 5 years: 5 × 21 days
- • Additional 2 years: 2 × 30 days
- • Mixed calculation method
- • Higher rate for longer service
Factors Affecting Gratuity
Contract Type
- • Unlimited contract rules
- • Limited contract provisions
- • Notice period impact
- • Resignation vs termination
Leave Impact
- • Unpaid leave treatment
- • Sick leave considerations
- • Annual leave inclusion
- • Special leave cases
Common Calculation Mistakes
- ⚠️ Including allowances in basic salary
- ⚠️ Wrong calculation of daily rate
- ⚠️ Incorrect service period calculation
- ⚠️ Overlooking partial year calculations
Legal Entitlements
- • Minimum service requirements
- • Resignation impact on gratuity
- • Termination scenarios
- • Payment timeline requirements
- • Dispute resolution process
Gratuity Rights Protection
- ✓ Documentation requirements
- ✓ Legal recourse options
- ✓ Ministry of Labor support
- ✓ Employee protection measures
Calculate Your Gratuity
Use our gratuity calculator to estimate your end-of-service benefits accurately.
Try Our Gratuity Calculator →Planning Your Exit
- 1. Document your employment history
- 2. Verify your basic salary records
- 3. Calculate expected gratuity
- 4. Understand notice requirements
- 5. Prepare necessary paperwork
- 6. Plan for post-employment transition
Special Considerations
- • Part-time employment impact
- • Freelance contract rules
- • Company merger scenarios
- • International transfer cases