How to Calculate Gratuity in UAE in Easy Steps 2025

Gratuity is a kind of financial bonus you get for your services when you leave a firm. As per UAE law, it is mandatory for all private companies to give their employees this end-of-service benefit when their working period is over with the corporation. Whether you’re moving to a new company in the UAE or simply resigning from the current one, it’s crucial to understand and know the gratuity amount you are entitled to receive. 

In this blog, Burj Diary show you how to calculate gratuity in UAE as per latest laws, both online and manually. With this guide, you can easily calculate your gratuity within minutes and ensure that you get the right amount from your current UAE employer. 

How to Calculate Gratuity in UAE Guide

Before we begin calculation methods, there are a few things you should know about UAE gratuity estimations. 

UAE Gratuity Determination Factors:

Gratuity in the UAE is calculated based on several factors. These include: 

• Your basic Salary Amount 
• Your serving period (number of years/months/days you’ve worked in the company)  
• The reasons behind leaving the company (Termination/Resignation/Expired Contract) 
• Your contract type (Limited/Unlimited/Limited Renewed)

In limited contracts, the worker stays with the company for a specified period with a set starting and ending date, as mentioned in the agreement. The contract expires automatically when the final date passes. If it is not renewed, the employees can move to another company by receiving their gratuity.   

Unlimited contracts have no specified starting or end date, and the employees can continue to work with the company as long as they want. It’s essential to serve a notice period of 2-3 months before resigning from the unlimited contracts. 

Limited Renewed contracts are the types of limited contracts with the possibility to be renewed after the mentioned ending date. Examples include contracts for hiring project-based or seasonal workers. 

The gratuity will be calculated using your last basic salary amount at the company, and it won’t include any added allowances or perks.

Gratuity Calculation Criteria if the Employee is Terminated:

When the contract of an employee ends or he/she is terminated, they will get their end-of-service amount as per the following criteria: 

• To be eligible for gratuity, you must have served the company for one continuous year. If you’ve left the firm before completing 1 year, then you won’t be able to get any gratuity. 
• For the first five years, the gratuity will be calculated according to your basic pay of 21 days for each year. 
• If you’ve served more than five years, then the gratuity for the 6th and subsequent years will be determined according to your 30-day basic pay for every following year, given that the total gratuity figure does not exceed the total of your two years of base salary amount. 
• While determining gratuity, unpaid leaves are not counted. 

Gratuity Calculation Criteria If Employees Resign:

If you’re wondering how to calculate gratuity in UAE in case of resigning, know that the calculations will differ slightly in this scenario:

• There will be no gratuity for resigning in the first year. 
• If you’ve completed one year and are resigning between 1 and 3 years, then you’ll receive 1/3 of your 21 days of basic pay as gratuity for every service year. 
• If you’re resigning between 3 and 5 years, your gratuity will be 2/3 of the basic pay of 21 days for each working year. 
• If you’ve worked for more than 5 years and you choose to resign after that, then you’ll get the complete 21 days of base salary as your gratuity for each service year. 
• No unpaid leave days will be added while calculating gratuity. 

Let’s now discuss different methods you can use to calculate your UAE gratuity as per above explained criteria. 

How to Calculate Gratuity in UAE: Online Methods

Since most people find it challenging to calculate gratuity manually, several online tools have been introduced in the UAE that employees can use to find out their applicable gratuity amount. You just have to enter your contract details, basic salary amount, and employment dates, and these tools will automatically calculate your gratuity for you. 

Here, we’ve illustrated two such online methods that you can quickly use to determine your UAE gratuity. Keep in mind that the calculated figures shown are estimates, and the actual amounts may differ as per your individual employment circumstances. 

Through the DDA Website:

Dubai Development Authority (DDA) features an online gratuity tool for UAE employees that calculates gratuity based on recent UAE Labor Law. Here’s how you can use it. 

1. Open the DDA’s gratuity calculator.
2. Write your work dates and basic salary amount and click on the calculate button. Your estimated gratuity figure will appear on the right.

Through MOHRE App:

It’s an official app of the UAE’s Ministry of Human Resources and Emiratisation (MOHRE), which provides a range of services and information on labor and employment matters in the UAE. Here’s how you can use this App to determine your final gratuity. 

1. Install the Mohre Application:

Apple App Store

Google Play Store

1. Open the App and sign in using your UAE Pass Account Details. 
2. Navigate to the End of Service Calculator button and click on it. 
3. You can find it by clicking on the show all button on the top right and then going to the employee section or by pressing the red circle button with four dots on the bottom of the app home page: 
4. Fill in your employment details, including your contract type, starting and ending work date, the reason for ending services, and basic income details, and hit the calculate button. 
5. Your estimated gratuity amount will appear in the results. Because it’s the official App of the human resource ministry, it’s considered the most accurate online method of how to calculate gratuity in UAE. 

How to Calculate Gratuity in UAE: Manual Method

Previously, the gratuity calculations in UAE were different for limited and unlimited contract types. However, as per the recent amendments to the UAE Labor law, employees on unlimited/indefinite contracts will be shifted to three-year renewable limited agreements.

That means the gratuity calculations will remain the same and won’t be affected by the contract type anymore. Keep in mind that the gratuity amount to be received depends entirely on number of service days of employees. 

Here’s how you can manually calculate gratuity under different limited contract types in the UAE. 

As discussed above, to calculate the gratuity, you need to know your monthly basic pay and the duration of the service period. Let’s consider a hypothetical salary to help you understand it better. 

Suppose you had a monthly basic salary of 8000 AED when you left the company. Your gratuity will be calculated in the following steps. 

First, you’ll determine your daily wage/per-day basic salary. 

You can find your per-day basic salary by simply dividing your total monthly basic pay by the number of days in a month. 

Per Day Salary = Basic monthly Salary/Days per month 

As per this example, it would be 266.67 AED. (Per Day Basic Salary = 8000/30 = 266.67 AED)

Next, you’ll multiply your per day salary with either 21 or 30 (depending upon the year number for which you’re calculating gratuity. If it is between 1 and 5 years, you’ll use 21; if it’s after the 6th year; and above, you’ll use 30). 

The resulting amount would be your entitled gratuity for each service year. 

Example: 

Here’s how to calculate gratuity in UAE manually as per the current example of 8000AED basic salary:

For the First Five Years:

Suppose you’ve completed one working year. Then, your gratuity will be 

Gratuity = (Per Day basic salary *21)

Gratuity= (266.67*21)

Gratuity= 5600 AED 

This amount represents your gratuity amount for one service year. And it will be the same for every service year until the first five years of employment.  

If you have completed two years, you’ll multiply it by 2 to determine the total gratuity for 2 years. (5600*2 = 11200 AED), With 3 to determine the total gratuity for 3 years (5600*3 = 16,800 AED), with 4 to determine the total gratuity of the first 4 years (5600*4 = 24,000 AED) and 5 to determine the total gratuity for the first 5 years (5600*5 = 28,000AED). 

For 6th and Subsequent Years:

Starting from the 6th service year, the UAE gratuity calculation will change slightly as it will be based on 30 days of basic salary. Following the example of 8000AED basic salary, below is how to calculate gratuity in UAE:

Gratuity = (Per Day basic salary *30)

Gratuity= (266.67*30)

Gratuity= 8,000 AED 

This figure represents your gratuity amount for the sixth year. And your gratuity for each year after the 6th will also be the same, i.e., 8,000 AED. The total gratuity for the 6th and 7th years will be 8000*2/8000+8000= 16,000, and for the 6th,7th, and 8th years would be 8000*3/ 8000+8000+8000 = 24000, and so on. 

Now, let’s combine the data to find gratuity for different serving periods using the same basic salary of 8000AED. 

But how to calculate gratuity in UAE if your experience is not in whole years and include different number of months like 2 years and 2 months, 6 years and 3 months?

Let’s consider some examples using the same basic salary of 8000 AED.

Example 1: How to Calculate Gratuity in UAE for 2 Years 3 Months:

As per the above calculation with an 8000AED basic salary, the gratuity of each service year for the first five employment years is 5600 AED.

Total Gratuity for 2 years 3 months = first year gratuity amount+ second year gratuity amount+ 3 months gratuity amount

Total Gratuity for 2 years 3 months = 5600 + 5600 + 3 months gratuity amount

Now, to find the gratuity for 3 months, you’ll first have to determine gratuity per day and then multiply it by the number of days (90 for 3 months).

You can find the gratuity per day using the one-year gratuity amount as follows:

Gratuity for one year of service = 5600 AED

Assuming 30 days each month, the total number of days per year will be 360. So,

Gratuity for one year of service = Gratuity for 360 days of service= 5600 AED

Gratuity for 1 Day of service = 5600/360=15.50 

So, Per Day Gratuity will be 15.50 AED for the first five years of the service period.

Now multiply it by the number of days in 3 months to get the gratuity of 3 months. 

Gratuity for 3 months of service= Gratuity for 90 days of service= 15.50*90

Gratuity for 3 months of service= 1395

So, the total gratuity for an employee with a service period of 2 years and 3 months under an 8000 AED basic salary would be 

Total Gratuity for 2 years 3 months = 5600 + 5600 + 3 months gratuity amount 

Total Gratuity for 2 years 3 months = 5600 + 5600 + 1395 

Total Gratuity for 2 years 3 months = 12,595 AED

You can follow this same example of how to calculate gratuity in UAE for finding the gratuity amount for any length of work during the first five years. 

Example 2: How to Calculate Gratuity in UAE for 6 Years 1 Month:

Considering the basic salary amount of 8000AED from the above examples. 

Total Gratuity for 6 years 1 months = first year gratuity + second year gratuity + third year gratuity + fourth year gratuity + fifth year gratuity + 6th year gratuity+ 1 month gratuity 

Total Gratuity for 6 years 1 months = 5600 + 5600+5600 + 5600+5600 + 8000 + 1 month gratuity 

Note that We’ve included gratuity for the 6th year as per 30 days basic salary. That’s why it is different from the first five years of gratuity, which are calculated using 21 days of basic pay.

Now, to calculate the 1-month gratuity amount for the 7th year, we’ll do the same. Finding gratuity per day and multiplying it by the number of days (30 for 1 month). However, since it comes under the 7th year of service, we’ll use the yearly gratuity amount as per 30 days. 

Gratuity for one year of service = 8000 AED

Assuming 30 days each month, the total number of days per year will be 360, So, 

Gratuity for one year of service = Gratuity for 360 days of service= 8000 AED

Gratuity for 1 Day of service = 8000/360=22.22 

So, Per Day Gratuity will be 22.22 AED after five years of service period. 

Now multiply it by the number of days in 1 month to get the gratuity of 1 month. 

Gratuity for 1 months of service= Gratuity for 30 days of service= 22.22*30

Gratuity for 1 month of service= 666

So, the total gratuity for an employee with a service period of 6 years and one month under an 8000 AED basic salary would be:

Total Gratuity for 6 years 1 months = 5600 + 5600+5600 + 5600+5600 + 8000 + 1 month gratuity 

Total Gratuity for 6 years 1 months = 5600 + 5600+5600 + 5600+5600 + 8000 + 666

Total Gratuity for 6 years 1 months = 36,666 AED

You can use a similar calculation method to find the gratuity amount for any number of years, days, or months in UAE. Just keep in mind that for the first five service years, you’ll use 21days basic salary amount, and for the 6th and next service years, you’ll use the 30-day basic salary amount. 

FAQs

What’s the easy method to check my UAE gratuity?

The easiest way to know your gratuity amount is to use online UAE gratuity calculating portals such as DDA and MOHRE. 

Is Gratuity Calculation in UAE Different for Limited and Unlimited Contracts?

No, it’s the same for all sorts of contracts in general and is determined based on the same fundamental factors, including basic pay and duration of work. 

What’s the Maximum Gratuity Amount an Employee Can Get in Uae?

According to the labor law of UAE, an employee can receive a maximum gratuity equal to the total of his two years of base pay at the company. It cannot exceed this figure no matter how many service years are increased. 

How Do I Calculate My Gratuity as an Employee in UAE?

You can find the gratuity amount by using any of the online or manual methods of how to calculate gratuity in UAE, as discussed above in this blog. You need to know your recent basic pay amount and total number of work years for these calculations. 

Are Online Gratuity Calculators Accurate?

These tools give you a general estimate of your entitled gratuity. Although accurate, the calculated amounts may differ as per your employment circumstances or any law changes by the official Ministry of Human Resources and Emirisation of UAE. 

What Things Are Considered for Gratuity Calculations in UAE?

The length of the working period of the employee and his last basic pay are the main factors for his gratuity estimation in UAE. The reason for leaving employment, such as resignation or termination, is also considered. 

Conclusion

The UAE government has established certain gratuity standards under its labor laws to ensure all local and foreign employees are compensated fairly for their services. Workers of all private companies in the UAE can find their gratuity amounts through their basic salary figures and service years either using online tools or manual calculations, as mentioned above. We hope after reading this guide, you’ll know everything about how to calculate gratuity in UAE.

Although most companies tell the applicable gratuity to employees themselves, it’s always recommended to double-check the relevant end-of-service figures yourself to ensure that you’re not being deceived and receive the correct amount you deserve as per the country’s law.