How UAE gratuity is calculated
Under Article 51 of Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, which replaced the 1980 Labour Law on 2 February 2022, a full-time private-sector employee who completes at least one year of continuous service is entitled to end-of-service gratuity. It is 21 days of basic wage for each of the first five years and 30 days of basic wage for each year after that. Parts of a year count pro rata once the first year is complete. The total can never exceed two years of basic wage. Days of unpaid leave or absence are not counted as service. This calculator converts your monthly basic salary to a daily rate by dividing by 30, which is how most employers and the MOHRE calculator do it.
A worked example
Say your basic salary is AED 6,000 and you have exactly seven years of service. The daily wage is 6,000 ÷ 30 = AED 200. For the first five years you get 5 × 21 = 105 days, and for the next two years 2 × 30 = 60 days, so 165 days in total. 165 × 200 = AED 33,000. If the same person had worked 30 years, the result would be capped at 24 months of basic salary, which is AED 144,000. Allowances such as housing and transport are not part of the calculation, which is why a high total package can still produce a modest gratuity.
Limited vs unlimited contracts and resigning
Since the new law, every private-sector contract is a limited, fixed-term contract, and the old unlimited contracts had to be converted. Under the current law, resigning no longer reduces your gratuity: if you have completed a year, you receive the full amount for your service. Under the old 1980 law, an employee on an unlimited contract who resigned received one third of the gratuity after one to three years, two thirds after three to five years, and the full amount after five years. Choose "Unlimited (old law)" only if that older rule still applies to you, for example in a dispute about a legacy contract.
What this calculator does not cover
It does not include unpaid salary, unused annual leave, notice pay or a return ticket, which are settled separately in your final settlement. It does not apply to DIFC or ADGM, which have their own employment laws and, in DIFC, the DEWS savings scheme instead of gratuity. Federal and local government employees, domestic workers and employees in a pension scheme for UAE or GCC nationals also follow different rules. If your employer deducts amounts it is owed, or your contract gives you more than the legal minimum, your final figure will differ. Treat the result as a reliable starting point for a conversation with HR, not a final settlement.