The daily wage is the monthly basic salary divided by 30.
AED 10,000 monthly basic salary, 8 years of service.
Monthly Basic Salary
AED 10,000
Years of Service
8
Daily Basic Wage
AED 333.33
Gratuity Payable
AED 65,000
The first five years pay 21 days a year (~AED 35,000) and the remaining three years pay 30 days a year (~AED 30,000), for a total of AED 65,000 — well under the AED 240,000 statutory cap (2 years’ basic salary).
End-of-service gratuity, officially the End-of-Service Benefit (EOSB), is a lump-sum payment every eligible private-sector employee in the UAE receives when their employment ends, whether by resignation, termination, or contract expiry. It is governed by Federal Decree-Law No. 33 of 2021, the UAE Labour Law, which took effect on 2 February 2022.
Unlike a pension, it is not funded through ongoing deductions from your pay — the employer pays the full amount as a lump sum once you become eligible, typically within 14 days of your last working day.
The calculation starts with your basic salary converted to a daily wage by dividing by 30. For each of your first five years of service, you earn 21 days of that wage; for every year beyond five, the rate rises to 30 days of wage per year.
This means gratuity accrues faster the longer you stay — a sixth year of service is worth more than a first year at the same salary, because it accrues at the higher 30-day rate.
The calculator shows your daily basic wage, the statutory two-year cap that applies to your salary, and the final gratuity payable after that cap is applied. Comparing the payable amount to the cap shows how much room you have before hitting the ceiling.
Because the calculation is based on basic salary only, entering your full gross salary — including housing or transport allowances — will overstate your result. Use the basic wage figure from your employment contract.
You need at least one full year of continuous service with the same employer to qualify at all. Once you cross that threshold, gratuity is calculated pro-rata for partial years using the same daily-wage method.
Total gratuity is capped at two years’ basic salary no matter how long you worked, which matters most for long-tenured employees at higher salaries — this calculator applies that cap automatically so the figure shown never exceeds it.
The 21/30-day formula applies to mainland private-sector employment under the federal Labour Law. Some financial free zones, notably DIFC and ADGM, run their own end-of-service benefit rules — DIFC, for instance, replaced the traditional gratuity scheme with a mandatory workplace savings plan (DEWS) for most employees.
Government employees, domestic workers, and UAE nationals registered with a pension authority also follow different schemes. Check which rules apply to your specific employer and emirate before treating this estimate as final.
This calculator applies the standard federal formula and cap, but real settlements can involve unpaid leave deductions, disciplinary matters, or an employer-run alternative savings scheme that changes how the payout works.
For a binding figure, especially around a resignation, termination, or retirement, confirm the calculation with your employer’s HR team or MOHRE directly, and consider legal advice if the amount is disputed.
Employees who complete at least one full year of continuous service with the same employer are eligible, whether the employment ends by resignation, termination, or contract expiry — the 2021 law removed the old distinction between how resignation and termination were treated.
Your monthly basic salary is divided by 30 to get a daily wage. Only the basic component counts — housing, transport, and other allowances are excluded.
The law pays 21 days of wages per year for the first five years of service, then 30 days per year for each year beyond that, so long-serving employees earn a higher rate on their later years.
Yes — total gratuity cannot exceed two years’ basic salary, regardless of how long you worked. This calculator applies that cap automatically.
Not under the current law. Federal Decree-Law No. 33 of 2021 removed the previous limited/unlimited contract distinction and the reduced gratuity for early resignation that came with it.
The UAE has no personal income tax, so gratuity is not taxed for most private-sector employees. If you are a cross-border worker, confirm whether your home country taxes it.
Not always. Some free zones run their own end-of-service benefit schemes — such as DIFC’s workplace savings plan — instead of the standard gratuity formula. Check your employment contract and free zone authority.
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
Finance disclaimer
Results are estimates based on the figures you enter and standard formulas. Rates, fees, taxes, and lender terms vary and change over time, so confirm important numbers with your lender or a qualified professional. This is educational information, not financial advice.
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