Free & Online Gratuity Calculator UAE 2025 (MOHRE Updated)
Gratuity Calculator UAE
Calculating your gratuity…
Your Gratuity Calculation Results
Calculation Breakdown
Working in the UAE, but not know much about gratuity, what it actually is and how it is calculated? If yes, then you are also one of the many employees who are confused about this, so there’s no need to worry. In this guide we will briefly breakdown the end of service benefits and you will know how our Gratuity Calculator UAE simplifies the entire process and allowing you to estimate your final settlement accurately within seconds.
Before proceeding with the calculation, let’s take a moment to understand what gratuity actually represents under UAE Labour Law.
What is Gratuity in the UAE?
Gratuity is a statutory payment provided by an employer to an employee in recognition of their service period with the company. In Dubai, Abu Dhabi, Sharjah or any other UAE city, this amount is officially referred to as the end-of-service benefit (EOSB) and is granted upon the termination or completion of employment.
There are three most widely spoken languages in the UAE, and the meaning of the word “Gratuity” in these languages is given below.
What is Gratuity Calculator UAE?
To make things easier for employees working in the United Arab Emirates, a Gratuity Calculator UAE online tool has been developed. The main purpose of this calculator is to provide accurate and error-free results in accordance with the latest UAE Labour Law and MOHRE rules, for employees who are either resigning from their company or have been terminated.
It’s important to note that, to qualify for gratuity and have it calculated, an employee must have completed at least one year of continuous service with their employer.
How to use this UAE Gratuity Calculator?
Manually calculated gratuity amount can be time-consuming and there is a risk of human errors in the calculations. To overcome this issue, we created this online gratuity calculator UAE tool which simplify the process. Since this tool has been developed using all the official gratuity formulas, there is no room for error when performing calculations in this estimator, you can use it with complete confidence.
To get an accurate and precise gratuity calculation, here are the steps you need to follow and the details you must enter into the calculator, in the correct order:
What is the benefit of using this MOHRE Gratuity Calculator Online?
In the past, employees in the UAE had little to no idea about what gratuity actually was or how it could be calculated at the end of their employment. Just like remembering complex mathematical formulas, employees used to struggle with figuring out their gratuity amounts.
However, since the Gratuity Calculator UAE has been developed to solve this problem, there are now several benefits to using it, as outlined below:
- As mentioned earlier, the biggest advantage of this calculator is that you don’t need to memorize any formulas. Since the calculator is updated according to the official MOHRE formula, it provides users with exact results. This saves time and increases trust in the calculator.
- Another benefit of using this calculator is that you can calculate your gratuity with complete confidence, as it is 100% reliable tool. Once you use it, there’s no need to look for any other tool or method.
- By using this calculator, you gain clear awareness of your end-of-service rights in the UAE and better understand what you are entitled to when your job ends.
- The gratuity calculator UAE is designed in a way that makes it equally useful and user-friendly for both employers and employees, allowing them to use it easily without any confusion.
How to calculate Gratuity while using it’s formula in the UAE?
In the UAE, a common question among employees is how the gratuity calculator UAE determines the amount, or which formula is used to calculate it manually. Let’s understand this in detail.
According to the UAE Labour Law, employees are entitled to gratuity based on their basic salary as follows:
For Example:
- Your Basic Salary = AED 2000
- Years of Service = 6
- For the first 5 years:
(2000 ÷ 30) × 21 × 5 = AED 7000 - For the 6th year:
(2000 ÷ 30) × 30 × 1 = AED 2000
Total Gratuity = AED 9000
- In this calculation, loans, advances, or any other amounts taken by the employee are deducted from the gratuity amount (Article 135).
- A break taken voluntarily from employment will affect the employee’s gratuity (Article 132).
- In case of the employee’s death, this amount is paid to his legal heirs (Article 51).
Who is Eligible for Gratuity?
Under the Article 51 of the UAE Labour Law, gratuity is a benefit granted to expatriate employees who have completed at least one year of continuous service in the private sector. UAE national employees are not eligible to receive gratuity; however, they are covered under the UAE National Pension Plan, which is mandatory. Expatriate workers are not eligible to participate in the UAE national pension plan.
Who is not Eligible?
- Employees who resign or are dismissed from a company within one year.
- Any employee who violates workplace rules (gross misconduct) or acts disrespectfully towards the employer, the employer has the right to terminate such an employee, and in this case, most employees are deprived of gratuity.
- Employees with limited-term contracts, if they do not complete at least five years of service and resign before that, they will also not be eligible for gratuity.
What steps you need to take for the calculation of End-of-Service Benefits (EOSB)?
As clearly stated in Article 51 of the UAE Labour Law, it is mandatory for the employer to give gratuity to such employees who have served for more than one year, and who are expatiate workers employed in the private sector.
For employees working in different cities of the UAE who wish to calculate their gratuity at the end of service, they must take special care of the following points before using this End of Service Calculator Dubai.
Completing the Minimum Years for Gratuity
While calculating UAE gratuity, keep in mind that your service period in the company where you have worked must be at least one year.
If you have not completed this period in any company, then you are not eligible for gratuity, and also not qualified to make the calculation.
Understand the Calculation of Your Basic Salary in the UAE
When calculating gratuity, most employees in the UAE do not understand their basic salary and mistakenly include their gross salary, which causes their calculation to become incorrect.
Understand this clearly, in this calculator, you have to enter only your basic salary in UAE Dirhams (AED), without including any allowances.
What is the difference between gross salary and basic salary?
Gross salary is the total amount you receive from the company every month, which includes the salary along with allowances such as transport expenses, housing costs, etc. Basic salary is the amount excluding allowances, for example, if your basic salary is AED 6000, and your gross salary (including allowances) is AED 9000, then for this example, your gratuity will be calculated based on your basic salary AED 6000.
Correctness of the Contract
When so many factors are being considered, if the contract is not properly understood before calculating, then errors can occur in the calculation as well. Therefore, choose the correct contract and specify whether it is a limited or unlimited contract (whichever type was signed with the employer).
Duration of Service
The most important part of this calculator is that you must enter your employment duration accurately.
Carefully input the starting date and ending date of your job because this will determine the total number of years you have served.
Reason for Leaving
This tool includes four options for the reason of leaving your company. Enter it carefully, whether you resigned, were terminated, your contract ended, or it was a mutual agreement.
Types of Contracts in the UAE
Before February 2023, according to the UAE Labour Law, there used to be two types of employment contracts, one was a limited contract and the other was an unlimited contract. However, after the introduction of this new UAE law, the unlimited contract has been abolished.
Now all private sector employees have to work in the company according to one contract, but in some places in the UAE, employees are still working according to those same old two contracts.
Limited Contract
After the abolition of the unlimited term contract, the contract that remains is the limited term contract, and it is now considered the standard employment contract in the UAE. In this contract, the duration of employment is a fixed term, which starts from a specified date and continues until the next specified date.
This contract is usually kept for a maximum of 2 or 3 years, and if there is an agreement between the employee and the employer, then the term duration and salary are increased. According to the old law, if any employee resigned from the company before the specified period, he was not eligible for gratuity.
But according to the new UAE Labour Law, now if an employee leaves the company before the fixed time but after completing one year of service, he will be fully entitled to that gratuity. The employee only has to give a notice period in this contract, as mentioned in the agreement.
Unlimited Contract
Since the unlimited term contract has been abolished, some employees in a few companies are still working while following all the rules of this contract. When this contract was active, in case of employee resignation, the gratuity amount used to be deducted significantly.
In this contract, if any employee resigned within one to three years, then two-thirds (2/3) of his gratuity would be deducted, and if he left the company between three and five years, then one-third (1/3) of his gratuity would be deducted. With the introduction of the new labour law, employees have benefited in terms of receiving gratuity because now, under the single limited term contract system, all employees receive full gratuity after completing one year of service.
Unlimited contract formula for gratuity calculation
If you have an unlimited contract with a company, you don’t have to work for a fixed time like 2 or 3 years. You can leave anytime, but you must give a 2 to 3 months’ notice. Similarly, if the company terminates you, they must also give you notice or pay you the equivalent salary for that period. In both cases, you are entitled to receive gratuity.
Resignation
In case of resigning under an unlimited contract, the company has certain rules for end-of-service benefits.
1. If the employee resigns before completing one year, they will not receive any gratuity from the company.
2. If the employee resigns after 1 to 3 years, they will receive one-third of 21 days’ basic salary per year as gratuity.
- For example,
Basic salary = AED 2000
Gratuity per year = 2000 × 21 ÷ 30 = 1400
1/3 of 1400 = AED 467 (per year)
3. If the employee resigns after 3 to 5 years, they will receive two-thirds of 21 days’ basic salary per year as gratuity.
- For example,
Same formula → 2/3 of 1400 = AED 934 (per year)
4. If the employee resigns after 5 years, they will receive 21 days’ basic salary per year for the first five years, and 30 days’ basic salary per year for each year beyond that as gratuity.
- For example,
First 5 years: 1400 × 5 = AED 7000
Next 3 years (after 5 year) : (2000 × 30 ÷ 30) = 2000 per year × 2 = AED 4000
AED 7000 + AED 4000 = AED 11000
Total Gratuity = 11000
Termination
1. If an employee is terminated before completing 1 year, they will not be entitled to any gratuity.
2. If you are terminated after completing 1 year but before completing 5 years, you will receive 21 days’ basic salary per year as gratuity.
3. If you are terminated after 5 years, you will receive 21 days’ basic salary per year for the first 5 years, and 30 days’ basic salary per year for every year beyond that as gratuity.
Can an employer refuse to pay gratuity?
According to Article 139 of the UAE Labour Law, employees may lose their gratuity due to the following reasons.
1. If someone presents a false identity or nationality, or submits fake documents.
2. If an employee is hired by the company only for checking purposes.
3. If the employee’s mistake causes a major loss to the company and the company reports it to the office within 48 hours.
4. If an employee violates the workplace safety rules of the company during the duty—rules that are written and have been explained to the employee beforehand.
5. If an employee does not perform their duty properly and keeps repeating the same mistake despite being warned.
6. If an employee gives all the confidential information of the company to someone outside.
7. If an employee is convicted in court of a crime that shows he is not honest.
8. If an employee is found under the influence of alcohol or drugs during work.
9. If an employee fights with the employer, manager, or co-workers during work.
10. If an employee takes leave without a valid reason for more than 7 continuous days or more than 20 days in a year.
11. If an employee leaves the job on their own without giving notice, unless a valid reason is stated under Article 121.
How can you secure your gratuity?
To keep your gratuity safe, you need to understand the rules under the UAE Labour Law. You must work for at least one year without a break, and keep good service record.
After your contract with the company ends, or if you are terminated or decide to leave, ask your employer for your gratuity. If they refuse for any reason, consult a lawyer or seek help from a legal authority to claim your end-of-service benefit.
In the UAE, you can follow the steps below to claim your gratuity.
Understand your employment contract clearly
Before starting any job anywhere in the UAE, carefully read the contract made with the company. Because, every job and contract (whether limited or unlimited) has different rules and conditions.
Know your legal rights under the UAE Labour Law
If you are planning to work in a company, and you don’t know about Emirates Labour Law or the rules for receiving gratuity, then make sure to learn about them properly before starting the job. This will help you understand when you will become eligible to receive gratuity.
Keep all your employment records safe with you
Keep all important job-related documents safe, such as the date you started and ended your job. Details of the salary you received from the company, and your contract information. These documents will help you claim your gratuity when needed.
Talk to your employer about gratuity concerns
Talk to your employer about this matter and openly ask any questions you may have. This will help both of you clearly understand each other regarding gratuity during your employment. Making it easier for your employer to pay it later and for you to receive it without any issues.
Take legal support
If you face any difficulty in receiving your gratuity or have any questions related to it, you can seek help from someone in the UAE who is an expert in this field. They can assist you in successfully claiming your end-of-service benefits.