How is gratuity calculated in the UAE?
Written by Usama Afzal. Last updated: October 2026. Based on the UAE Labour Law; not legal advice.
Short answer
Take your last basic salary, divide by 30 to get the daily wage, then multiply by 21 days for each of your first 5 years and by 30 days for each year after that. Part-years count proportionally, and the total can't exceed 2 years' salary.
The formula
- Daily wage = last basic salary ÷ 30
- First 5 years: daily wage × 21 × years
- After 5 years: daily wage × 30 × extra years
- Cap: no more than 24 months of salary
Examples
| Basic salary | Service | Gratuity (AED) |
|---|---|---|
| 3,000 | 4 years | 8,400 |
| 3,000 | 7 years | 16,500 |
| 5,000 | 10 years | 42,500 |
What counts and what doesn't
Only basic salary counts: housing, transport and other allowances are left out. You need at least 1 year of continuous service, and days of unpaid absence aren't counted.
Free zones are different
DIFC and ADGM have their own rules, and some companies use the government's alternative savings scheme instead of gratuity. The UAE calculator is for regular mainland jobs.
Work out your own amount
Enter your dates and salary to see your end-of-service pay instantly.