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ExcelGuru.io | UAE Gratuity Calculator – Accurate End of Service Benefits (2025)

UAE Gratuity Calculator 2025

Accurate End-of-Service Benefits (EOSB) – Limited & Unlimited Contracts | Resignation & Termination

100% free & client-side – your data never leaves your device.

Employee & Contract Details

Your Estimated End-of-Service Benefit

0 AED
Based on UAE Federal Decree-Law No. 33/2021. For limited contract resignation before 5 years, actual legal entitlement may be zero – this calculator provides a pro-rated estimate for illustration.

How to Use the UAE Gratuity Calculator

1. Enter Basic Salary

Only the basic salary as per your contract (excludes housing, transport, etc.).

2. Years of Service

Include full and partial years (e.g., 4.5 years).

3. Contract Type

Choose Limited (fixed-term) or Unlimited (open-ended).

4. Leaving Reason

Termination or resignation with service range.

5. Calculate

Click to see your estimated gratuity and detailed breakdown.

Pro Tip: Use the calculator with different scenarios to see how resignation vs termination affects your payout. For limited contracts, note the legal disclaimer.

Comparison: ExcelGuru vs Other UAE Gratuity Calculators

FeatureExcelGuru GreenPathMOHRE WebsiteBayt.comGulfTalentSalaryExplorer
Client-side privacy (no data sent)✅ Yes❌ No❌ No❌ No✅ Yes
Supports Limited & Unlimited contracts✅ Yes✅ Yes✅ Yes✅ Yes❌ No
Resignation vs Termination scenarios✅ Yes (pro-rated for limited)✅ Yes❌ No❌ No❌ No
Fractional years (partial service)✅ Yes❌ No❌ No❌ No❌ No
Detailed calculation breakdown✅ Yes❌ No❌ No❌ No❌ No
Legal disclaimer for limited contract✅ Yes✅ Yes❌ No❌ No❌ No
Free & no registration✅ Yes✅ Yes✅ Yes✅ Yes✅ Yes

ExcelGuru's calculator is the only one offering fractional years, a transparent breakdown, and a clear legal warning for limited contract resignations – all while keeping your data private.

The Complete Guide to UAE Gratuity Calculation (2025 Edition)

If you work in the United Arab Emirates, understanding your end-of-service benefits (EOSB) – commonly known as gratuity – is essential for financial planning. Whether you are considering resignation, facing termination, or simply want to know your rights, this comprehensive guide (1500+ words) covers everything: legal framework, calculation formulas, contract types, resignation penalties, and how to use our UAE Gratuity Calculator effectively.

What is Gratuity in UAE Labour Law?

Gratuity is a mandatory lump sum payment that employers must pay to employees who have completed at least one year of continuous service. It is governed by Federal Decree-Law No. 33 of 2021 (the new UAE Labour Law), which replaced the old law of 1980. The new law introduced clearer definitions for limited vs unlimited contracts, updated rules for resignation, and extended coverage to domestic workers and part-time employees.

Key Factors That Determine Your Gratuity Amount

  • Basic Salary: Only the basic salary (as stated in your labour contract) is used. Housing, transport, and other allowances are excluded.
  • Years of Service: The longer you work, the higher your gratuity. The first 5 years earn 21 days of basic salary per year; each additional year earns 30 days per year.
  • Contract Type: Limited (fixed-term) vs Unlimited (open-ended) contracts have different rules, especially for resignation.
  • Reason for Leaving: Termination without cause yields full gratuity. Resignation may reduce the amount depending on service length.
  • Maximum Cap: Total gratuity cannot exceed two years' basic salary.

How to Calculate Gratuity: Step-by-Step Formula

Follow these steps to manually compute your EOSB:

  1. Calculate daily wage: Basic Monthly Salary ÷ 30.
  2. Compute gratuity for first 5 years: 21 × Daily Wage × Years of Service (up to 5).
  3. Compute gratuity for additional years: 30 × Daily Wage × Years beyond 5.
  4. Add both parts. If total exceeds 2 years' basic salary, cap at that amount.
  5. Apply resignation reduction (if applicable):
    • 1–3 years service → 1/3 of full gratuity
    • 3–5 years service → 2/3 of full gratuity
    • 5+ years → full gratuity

Our calculator automates all these steps, including fractional years (e.g., 4.5 years) and the correct reduction for limited contracts (with a legal disclaimer).

Limited Contract vs Unlimited Contract: What's the Difference?

Limited Contract (Fixed-term): Has a specific end date. If the employer terminates without cause, you receive full gratuity. If you resign before the end date, the law is strict – you may forfeit your gratuity entirely, unless the contract states otherwise or you have served more than 5 years. Our calculator provides a pro-rated estimate (1/3 or 2/3) for educational purposes, but always check with MOHRE or a lawyer.

Unlimited Contract (Open-ended): No fixed end date. Resignation reduces gratuity according to the service brackets above. Termination without cause gives full gratuity.

Real-Life Calculation Examples

Example 1 (Unlimited, Termination): Basic salary 10,000 AED, 6 years service, terminated without cause. Daily = 333.33 AED. First 5 years: 5×21×333.33 = 35,000 AED. Additional 1 year: 1×30×333.33 = 10,000 AED. Total = 45,000 AED (below cap).

Example 2 (Limited, Resignation, 2 years): Basic 10,000 AED, 2 years service, limited contract resignation. Full gratuity = 2×21×333.33 = 14,000 AED. Resignation reduction (1-3 years) = 1/3 → 4,667 AED. But legally, this may be zero – always verify.

Example 3 (Unlimited, Resignation, 4 years): Basic 8,000 AED, 4 years service. Full gratuity = 4×21×266.67 = 22,400 AED. Reduction (3-5 years) = 2/3 → 14,933 AED.

Why Use ExcelGuru's Gratuity Calculator?

Most online calculators are either outdated (using old Labour Law), do not handle partial years, ignore resignation reductions, or send your data to servers. ExcelGuru's tool is:

  • 100% client-side: Your salary and service details never leave your browser.
  • Fractional year support: Enter 5.5 years and get accurate pro-rated results.
  • Contract-aware: Different rules for limited vs unlimited contracts.
  • Transparent breakdown: Shows daily wage, full gratuity, reduction percentage, and final amount.
  • Legal disclaimer: Clearly warns about limited contract resignation risks.

Legal Pitfalls and Common Mistakes

  • Including allowances: Many employees mistakenly use total salary. Only basic salary counts.
  • Ignoring fractional years: Every month of service beyond a full year adds to your gratuity.
  • Assuming resignation gives full gratuity: For unlimited contracts, resignation reduces it; for limited contracts, you might get nothing.
  • Not checking the cap: If your basic salary is very high, the 2-year cap may apply.

How to Dispute an Incorrect Gratuity Payment

If your employer underpays or refuses to pay gratuity, follow these steps:

  1. Calculate your entitlement using our tool and save the breakdown.
  2. Send a formal written request to your employer referencing Article 51 of Labour Law No. 33/2021.
  3. If unresolved, file a complaint with MOHRE (call 80060 or visit a Tas'heel center).
  4. MOHRE will attempt mediation; if unsuccessful, the case goes to labour court.

Frequently Asked Questions (25 Questions)

Below you'll find a collapsible FAQ section with the most common questions about UAE gratuity – from taxability to free zones, probation periods, and more.

Top 25 Frequently Asked Questions about UAE Gratuity

1. Is gratuity calculated on basic salary or total salary?
Only basic salary as per your labour contract. Allowances (housing, transport, etc.) are excluded.
2. How many years of service are required to get gratuity?
Minimum 1 year of continuous service. Less than 1 year = no gratuity.
3. What is the maximum gratuity amount?
Cannot exceed 2 years' basic salary.
4. Does resignation reduce gratuity for unlimited contracts?
Yes. 1-3 years: 1/3; 3-5 years: 2/3; 5+ years: full.
5. What happens if I resign from a limited contract before the end date?
Legally you may forfeit gratuity entirely. Some courts may award pro-rated amounts. Our calculator shows an estimate with a clear warning.
6. Is gratuity taxable in UAE?
No, there is no personal income tax in the UAE, so gratuity is tax-free.
7. Can I get gratuity if I am terminated for misconduct?
You may forfeit gratuity partially or fully depending on the violation (Article 44 of Labour Law).
8. How are fractional years calculated?
Any period beyond full years is prorated. Example: 5.5 years = 5 full years + 0.5 year (using 21 days if under 5 years, else 30 days).
9. Does unpaid leave affect gratuity?
Unpaid leave periods are typically excluded from service length.
10. Are free zone employees covered by the same law?
Most free zones follow the federal law, but some (DIFC, ADGM) have their own employment laws. Check your contract.
11. Can my employer refuse to pay gratuity?
No, it's a legal obligation. File a complaint with MOHRE if unpaid.
12. Is gratuity included for domestic workers?
Yes, domestic workers are now covered under the 2021 law and are entitled to gratuity after 1 year.
13. How do I calculate daily wage for gratuity?
Daily wage = Basic Monthly Salary ÷ 30 (including weekends).
14. Does the 2-year cap apply before or after resignation reduction?
The cap applies to the full calculated gratuity before any resignation reduction.
15. Is gratuity paid in installments?
No, it must be paid as a lump sum upon termination or resignation.
16. How do I file a complaint for unpaid gratuity?
Contact MOHRE at 80060 or visit a Tas'heel centre.
17. Are commission-based employees eligible for gratuity?
Yes, if they have a basic salary component. Only the basic salary is used.
18. Does the probation period count toward service?
No, probation does not count.
19. What if my employer goes bankrupt?
You can claim from the Workers' Protection Fund through MOHRE.
20. Can I get gratuity if I am dismissed during probation?
No, because probation does not count toward service.
21. Is there a difference for part-time employees?
Part-time workers are entitled to pro-rated gratuity based on actual hours worked.
22. Does the calculator include end-of-year bonuses?
No, only basic salary. Bonuses are not included by law.
23. Can I use this calculator for multiple years of service with gaps?
For broken service, each continuous period counts separately. This calculator assumes continuous service.
24. What if my contract says "no gratuity"?
Any clause that contradicts Labour Law is void. You are still entitled to gratuity.
25. How often is the gratuity law updated?
The current law (No. 33/2021) is the main framework. Updates are rare; this calculator reflects the latest version.
ExcelGuru.io – Trusted financial calculators for UAE. Data is private, always free.
Disclaimer: This tool provides estimates based on UAE Labour Law. Actual entitlement may vary. For official advice, consult MOHRE or a legal professional.