This methodology explains how the UAE Gratuity Calculator works for private-sector mainland and free zone employees. It will be updated when additional tools are added to this site.
What Law Does the Calculator 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: Basic salary divided by 30 gives the daily wage.
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: Pro-rata for partial years: Partial years use proportional calculation. A service period of one year and four months counts as 1.33 years, not one year.
Step 4: Two-year cap: The total gratuity cannot exceed 24 months of basic salary under Article 51. This cap applies to all MOHRE-regulated companies and most free zones. It does not apply to ADGM.
Step 5: Unpaid leave deduction: Unpaid leave days reduce the service period under Article 38. 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. Under Article 52: part-time employees receive pro-rated gratuity. Enter your percentage of full-time hours in the Part-Time field. A value of 50 means you work half the full-time hours and receive 50 percent of the full-time gratuity amount.
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 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.
How Does the Calculator Work for ADGM Employees?
ADGM employees follow different rules from mainland UAE staff. The two-year salary cap does not apply, and the daily wage uses a 365-day method instead of the standard divide-by-30 formula. Tick the ADGM checkbox in the calculator to apply both adjustments. The rest of the calculation follows the same 21-day and 30-day rate model.
Under ADGM Employment Regulations 2024, effective 1 April 2025, the standard two-year salary cap does not apply. ADGM uses the same 21-day and 30-day model as the mainland. However, ADGM calculates the daily wage differently. It uses the number of days in the year, not the standard monthly-salary-divided-by-30 method. Confirm the exact figure with your employer or the ADGM Employment Affairs Office before using it in any final settlement.
Removing the cap significantly increases the entitlement for long service periods. A standard mainland calculator applied to an ADGM employee will understate their payout. Tick the ADGM Employee checkbox in the calculator to remove the two-year cap and apply the 365-day daily rate.
What the Calculators Do Not Cover
The main gratuity calculator covers mainland UAE private sector employees under Federal Decree-Law No. 33 of 2021 only. It does not calculate 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.
Leave encashment: Unused annual leave owed at termination is calculated separately and is not included in the gratuity result.
Full final settlement: Your total settlement includes gratuity plus unpaid salary, leave encashment, and notice pay, minus approved deductions. The calculator covers gratuity only.
Domestic worker gratuity: Domestic worker’s final payout follows a different legal framework. It is not covered by the same rules as private-sector employee gratuity. This standard gratuity tool does not cover it.
Notice period pay: Notice period pay is separate from end-of-service gratuity. For full details, see our UAE Labour Law guide.
DIFC employees: DIFC operates under the DEWS scheme, not the standard formula. Check your DEWS account balance directly.
Voluntary Savings Scheme: Employers enrolled in the voluntary savings scheme introduced under Cabinet Resolution No. 96 of 2023 calculate benefits from fund contributions, not the Article 51 formula. If your employer participates, this calculator does not apply. Contact your HR department to confirm your 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.
How Often Is the Calculator Updated?
We review the calculator 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 tool when required. The last full review was completed in April 2026. If you notice a result that appears outdated, use the contact form and we will review your submission.
Who Writes and Reviews the Calculator 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 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.