UAE Gratuity Calculators Methodology: How Our Tools Work

This methodology covers eight tools, each built on a specific legal basis.

What Laws Do the Calculators Apply?

How Is the Gratuity Amount Calculated?

The calculation follows Article 51 of Federal Decree-Law No. 33 of 2021. Gratuity is based on basic salary only. Allowances are excluded. The tool applies the daily wage formula, the correct rate for your service years, and pro-rata adjustments automatically.

Step 1: Daily wage: For mainland and MOHRE-aligned monthly-paid employees, basic salary ÷ 30 gives the daily wage. For ADGM employees, Annual Basic Wage ÷ 365 is used.

Step 2: Eligible days per year. The rate is 21 days per year for the first five years of continuous service. It increases to 30 days per year for every year beyond five years.

Step 3: Prorata for partial years: Partial year uses proportional calculation. A service period of one year and four months counts as 1.33 years, not one year.

Step 4: Two-year cap: Mainland and MOHRE-aligned gratuity cannot exceed 24 months of basic salary under Article 51. The mainland cap does not apply to ADGM, which uses Annual Basic Wage ÷ 365.

Step 5: Unpaid leave deduction: Unpaid leave days reduce the service period. The calculator applies this deduction when you enter unpaid leave days in the advanced options. Annual leave, sick leave, and maternity leave are paid leave and count toward service normally.

Step 6: Part-time ratio. Article 52 works with Article 30 of Cabinet Resolution No. 1 of 2022. Divide annual contract hours by annual full-time hours, then multiply by 100. Enter that percentage in the Part-Time field.

Step 7: Wage frequency: The standard formula divides monthly salary by 30. This applies to monthly-paid employees only. For weekly, fortnightly, or daily-rate employees, the daily wage is calculated from the actual pay rate. Select your wage frequency in the advanced options and the calculator applies the correct method.

Every result shows your daily wage, eligible days, cap status, and service years so you can verify each step. Use the One-Click Copy button to export the full breakdown. The export includes your daily wage, eligible days, service years, cap status, and final figure. Save it before your last working day. It gives you a ready reference for settlement reviews, HR disputes, and MOHRE complaints.

How Does the Gratuity Calculator Handle Legacy Unlimited Contracts?

Unlimited contracts were phased out under the 2021 law. Some employees who held unlimited contracts before February 2023 still need legacy gratuity calculations. This applies where older employment arrangements or open settlement disputes exist. For more on legacy employment structures, see our guide on limited and unlimited contracts.

For these employees, resignation and termination produce different results. Resignation before three years gives one-third of the standard gratuity. Resignation between three and five years gives two-thirds. Resignation after five years gives full gratuity. Termination at any point after one year gives full gratuity.

The calculator applies these legacy rules automatically when you select Unlimited Contract and Resignation as the reason for leaving. For a full comparison of how current-law resignation and termination affect your notice pay and gratuity, see our Termination vs Resignation guide.

How Does the Calculator Work for ADGM Employees?

ADGM employees follow different rules from mainland UAE staff under ADGM Employment Regulations 2024, effective 1 April 2025. The two-year salary cap does not apply. The daily wage uses the number of days in the year rather than the standard monthly-salary-divided-by-30 method. The rest of the calculation follows the same 21-day and 30-day rate model as the mainland.

Removing the cap significantly increases the entitlement for long service periods. A mainland calculator applied to an ADGM employee will understate their payout. Tick the ADGM Employee checkbox to use Annual Basic Wage ÷ 365 and remove the mainland cap. Enter the higher of your basic wage or 50% of your total wage for the selected pay period. The tool uses the figure entered and does not verify the 50% rule. Confirm the exact figure with your employer or the ADGM Employment Affairs Office before using it in any final settlement.

How Does the Death Gratuity Calculator Work?

The Death Gratuity Calculator estimates employment entitlements when an employee dies during service. It has separate calculation paths for federal-law employment and ADGM employment. It does not calculate inheritance shares or decide who legally owns the estate.

For federal-law employees, the tool calculates end-of-service gratuity under Article 51 using the last basic salary and eligible service period. It also calculates unused annual leave entered by the user.

The federal deadline is based on Article 15. The employer has 10 days from the employee’s death or from when the employer becomes aware of the death to hand over the applicable wages, financial entitlements, and end-of-service benefits.

If the user selects a qualifying work-related death, the federal calculation also applies Article 37. Compensation equals 24 months of basic wage, subject to a minimum of AED 18,000 and a maximum of AED 200,000. The calculator does not determine whether an incident legally qualifies as a work injury. The user must select this based on the facts of the case.

For ADGM employees, the tool applies the ADGM Employment Regulations 2024. Gratuity uses 21 days of Basic Wage for each of the first five years and 30 days for each later year. The daily rate uses Annual Basic Wage divided by 365. For gratuity purposes, Basic Wage cannot be less than 50% of Annual Wages. The federal two-year gratuity cap does not apply.

For an ADGM work-related death, the calculator does not produce a fixed damages figure. Section 48 leaves the final award to the ADGM Court where its legal conditions are satisfied, so the result is shown as court-determined.

The combined result includes only the amounts the calculator can estimate. These are gratuity, entered unused leave, and qualifying federal work-death compensation. It does not add unpaid salary, insurance benefits, inheritance shares, estate debts, loans, advances, repatriation costs, or other settlement adjustments.

The death calculator does not currently apply the federal part-time or job-sharing percentage adjustment. For those employment patterns, calculate the gratuity component under the applicable Article 52 and Article 30 rules before relying on the final figure.

The standard gratuity calculation also does not apply to service periods covered by the UAE Alternative End-of-Service Benefits Savings Scheme. Once an employee is enrolled, the employer stops applying the traditional gratuity system for that enrolled period. Any gratuity accrued before enrolment remains separate.

What the Main Gratuity Calculator Does Not Cover

The main gratuity calculator covers standard end-of-service gratuity calculations. It does not calculate a complete death settlement, leave encashment, notice pay, domestic worker gratuity, or DIFC DEWS balances. Each follows separate rules. The items below explain what falls outside the tool and where to find the correct resource. Not sure which employment regime applies first? Compare mainland, standard free zones, DIFC, ADGM, and government gratuity rules.

Gratuity application letters: The calculators produce figures only. To formally claim your payment from HR or file a MOHRE complaint, use the Gratuity Application Letter Generator.

Leave encashment: Unused annual leave owed at termination is calculated separately and is not included in the gratuity result. The formula is basic salary divided by 30, multiplied by unused leave days, under Article 29(9) of Federal Decree-Law No. 33 of 2021. Use the leave salary calculator for a full breakdown including the formula, worked examples, and final settlement guidance.

Full final settlement: Your total settlement includes gratuity plus unpaid salary, leave encashment, and notice pay, minus approved deductions. The calculator covers gratuity only. To check which deductions are lawful and which are unlawful, check our settlement deduction checker.

Domestic worker gratuity: Domestic worker’s final payout follows a different legal framework governed by Federal Decree-Law No. 9 of 2022. Use the dedicated Domestic Worker Gratuity Calculator for this category.

Notice period pay: Notice period pay is separate from end-of-service gratuity. For full details, see our notice period calculator and guide. If you’re comparing how resignation versus termination affects that notice pay specifically, see our Termination vs Resignation guide.

Overtime pay: Overtime is paid separately from gratuity and is not included in the end-of-service figure. For the full rate table and calculator, see our overtime calculation guide.

DIFC employees: DIFC operates under the DEWS scheme, not the standard formula. Check your DEWS account balance directly.

Voluntary Savings Scheme: Employers participating in the Alternative End-of-Service Benefits Savings Scheme under Cabinet Resolution No. 96 of 2023 use fund contributions for enrolled service instead of the traditional Article 51 gratuity system. This affects both the main Gratuity Calculator and the Death Gratuity Calculator. Gratuity accrued before enrolment remains separate. Contact your HR department or scheme administrator to confirm the enrolment date, fund balance, and contribution history.

Employees on foreign contracts: If your employment contract is governed by a law outside the UAE, this calculator does not apply.

Employee death: A death settlement can involve a different payment deadline, unused leave, beneficiary rules, repatriation duties, and separate work-death compensation. Use the Death Gratuity Calculator instead of relying only on the standard gratuity result.

How Is Domestic Worker Gratuity Calculated?

The Domestic Worker Gratuity Calculator applies the 14-day formula. This comes from Federal Law No. 10 of 2017, which has since been repealed. Federal Decree-Law No. 9 of 2022 now governs domestic workers but delegates gratuity specifics to Cabinet resolutions and individual contracts. No replacement formula has been prescribed by law. In practice, the 14-day approach remains widely used in settlements.

The formula works as follows.

• Basic salary divided by 30 equals the daily wage.
• Daily wage multiplied by 14 equals the gratuity per year of service.
• Gratuity per year of service multiplied by years of service equals the total gratuity.
• Only basic salary counts. Food allowance, accommodation, and transport are excluded. Partial years use proportional calculation. Three years and six months uses 3.5 as the multiplier. The two-year cap used in the main labour law does not apply to this estimate.

The result is an industry-standard estimate, not a statutory figure. Outcomes can vary depending on your contract and the specific terms agreed. Confirm the applicable formula with your sponsor and check your contract before relying on this figure for a final settlement.

How Does the Notice Period Calculator Work?

The Notice Period Calculator estimates your last working day and final settlement deadline based on Article 43 of Federal Decree-Law No. 33 of 2021. It applies mainland UAE rules only. It does not cover DIFC, ADGM, or domestic worker frameworks.

The tool applies three separate legal paths depending on your employment status and situation.

Confirmed employee: The tool takes your resignation or termination date, adds your contract notice period in calendar days, and returns your last working day. It then adds 14 calendar days to give you the settlement due date under Article 53.

Probation, employer terminates: The tool applies the 14-day minimum under Article 9 of Federal Decree-Law No. 33 of 2021.

Probation, employee resigns to UAE job: The tool applies the 30-day minimum under Article 9.

Probation, employee resigns leaving UAE: The tool applies the 14-day minimum under Article 9.

The tool counts calendar days, not working days. This matches how UAE Labour Law applies the notice period under Article 43. If your contract specifies working days explicitly, the result will differ from the tool output. Verify with HR before relying on the date.

The settlement deadline output assumes Article 53 applies. Actual settlement timing may vary by jurisdiction, documentation status, and employer compliance.

How Does the Leave Salary Calculator Work?

The Leave Salary Calculator applies Article 29(9) of Federal Decree-Law No. 33 of 2021, read with Article 19 of Cabinet Resolution No. 1 of 2022. It covers unused leave encashment at resignation, termination, or end of contract. It does not cover leave salary paid during employment, which your employer calculates on full wage basis.

The calculation has two inputs: your basic monthly salary and your unused leave days.

Step 1: Daily wage. Basic salary divided by 30 gives the daily wage. The divisor of 30 is the standard practice for monthly-paid employees under UAE labour law.

Step 2: Encashment amount. Daily wage multiplied by unused leave days gives the total encashment owed. The result shows your daily wage and your total encashment figure as separate lines so you can verify each step against your employer’s settlement calculation.

Note: Leave salary during employment (when you take approved annual leave) uses full wage including fixed allowances, not basic salary only. The calculator covers the separation scenario only. For the full formula and worked examples covering both scenarios, see the leave salary calculation guide.

How Does the Overtime Calculator Work?

The Overtime Calculator applies Article 19 of Federal Decree-Law No. 33 of 2021. It covers UAE mainland and standard free zone private sector employees. It does not cover DIFC, ADGM, or domestic worker frameworks. 

The calculation has two inputs: your basic monthly salary and your overtime hours. 

Step 1: Basic hourly wage: Basic salary divided by 30, then divided by 8, gives your basic hourly wage. 

Step 2: Rate selection: Regular weekday hours use 125 percent. Night hours, rest days, and public holidays use 150 percent. 

Step 3: Ramadan toggle: Turning on the Ramadan option shifts your daily threshold from 8 hours to 6 hours. Overtime then starts after the sixth hour. 

Step 4: Final calculation: The tool multiplies your basic hourly wage, the selected rate, and your overtime hours to give your total overtime pay. 

Overtime is not included in gratuity, which uses basic salary alone under Article 51. For the full rate table and worked AED examples, see the overtime calculation guide.

How Does the Illegal Deduction Checker Work?

The checker matches your selected reason against the five categories in Article 29 of Cabinet Resolution No. 1 of 2022. Five reasons return a conditional lawful result. Loan or overpayment, pension or insurance shortfall, disciplinary penalty, court debt, and employee-caused damage. Three reasons return an unlawful result. Recruitment or visa fees, uniform or equipment costs, and unexplained amounts.

The checker does not verify documents. A lawful category still needs proof behind it, such as a signed agreement or a court order. The tool tells you what evidence to look for. It does not confirm that evidence exists.

The checker gives a general indication only, not legal advice. Read our full guide on gratuity deductions for the complete legal breakdown.

How Often Are the Calculators Updated?

We review the calculators and all formulas every quarter. We assess any change to UAE labour law or MOHRE guidelines within 30 days of publication. We apply updates to the tools when required. The last full review was completed in June 2026. If you notice a result that appears outdated, use the contact form and we will review your submission.

Who Writes and Reviews the Content?

Noura Al-Qaseer writes all content on this site. She is a senior HR manager with over 20 years of experience in the UAE private sector. Adv. Marwan A. Hamid, a UAE Ministry of Justice-licensed advocate, reviews all legal content before publication. Full profiles are on our About Us page.

If a result appears incorrect or a legal change is not yet reflected, contact us. We review every submission.

Why Does My Gratuity Result Look Wrong?

The most common cause is salary input. Gratuity uses basic salary only. If you entered your total salary including allowances, your figure will be too high. Re-enter only the basic salary line from your payslip. The second common cause is service dates. Check that your start date matches your MOHRE-registered contract, not your visa date or offer letter date. If your contract type is set to Limited but your employer is calculating using old deduction rules, select Legacy Unlimited and Resignation to compare both figures. Use the difference as evidence in a MOHRE complaint.