UAE gratuity calculator
End-of-service gratuity in seconds — the 21/30-day Labour Law formula applied correctly to basic salary, with the two-year cap.
The formula, plainly
- Daily rate = basic salary ÷ 30
- Years 1–5: 21 days per year
- Year 6 onwards: 30 days per year
- Partial years pro-rated; total capped at two years' pay
- Less than 1 year of service: no gratuity entitlement
Final settlements add notice pay, accrued leave and lawful deductions on top. We prepare full settlement workings both sides can sign without argument.
Get a settlement preparedFAQs
How is end-of-service gratuity calculated?
Under UAE Labour Law: 21 days' basic salary per year for the first five years of service, 30 days per year thereafter, based on the final basic salary. A day's pay is basic salary ÷ 30. Total gratuity is commonly capped at two years' pay.
Does gratuity use basic salary or total salary?
Basic salary only — allowances (housing, transport) are excluded. This is a frequent payroll error that overstates or understates settlements.
Do employees who resign get full gratuity?
Under the current Labour Law, employees on standard contracts who complete at least one year of service are entitled to gratuity on the same basis, whether they resign or are terminated (subject to lawful-dismissal exceptions).
Should gratuity appear in my monthly accounts?
Yes — it's an accruing liability. Recognising it monthly keeps your P&L honest and prevents a year-end shock when someone leaves.
Numbers raising questions?
These tools give estimates. We give answers — free first consultation, fixed fees after.