UAE Gratuity Calculator 2025 – End of Service Benefits as per UAE Labour Law

UAE End of Service Gratuity Calculator (2025) – Estimate Gratuity as per UAE Labour Law

End of Service Gratuity (EOSB) is one of the most important financial benefits for employees in the UAE. However, it is also one of the most misunderstood parts of final settlement. Many employees are unsure how gratuity is calculated, what “basic salary” includes, how unpaid leave affects eligibility, and how partial years of service are treated.

This UAE Gratuity Calculator is designed to help employees, supervisors, and HR professionals estimate gratuity using the standard UAE labour law structure. It provides a clear and transparent breakdown so you can understand your final settlement, plan your finances, and negotiate with confidence.

Important: This calculator provides an estimate based on UAE labour law principles and common HR practices. Final gratuity amounts depend on your employment contract, employee category, lawful deductions, and company policy.

UAE Gratuity Calculator (2025)

How to use: Enter your last basic monthly salary and total service period. Add unpaid absence days (if any) to improve accuracy.

Last Basic Monthly Salary (AED)
Gratuity is commonly calculated based on basic salary, not allowances.

Years of Service

Additional Months

Additional Days

Unpaid Absence Days (Optional)
Unpaid absence days are generally excluded when calculating service duration.

Calculate Gratuity

What Is End of Service Gratuity in the UAE?

End of Service Gratuity (also called EOSB) is a statutory employee benefit payable at the end of employment. It is a key component of final settlement for most private-sector employees in the UAE.

Who Is Generally Eligible?

• Employees who complete at least one year of continuous service
• Gratuity is calculated using the last basic salary
• Partial years of service may be calculated proportionately (pro-rata), subject to records and company policy

How Gratuity Is Calculated in the UAE (Simple Explanation)

The UAE gratuity formula is typically based on a set number of days of basic wage per year of service:

• First 5 years: 21 days of basic wage per year
• After 5 years: 30 days of basic wage per year
• Maximum cap: Gratuity should not exceed two years of wage (commonly treated as 24 months of basic wage)

This calculator follows this structure and provides a transparent breakdown of your estimated gratuity.

Step-by-Step Gratuity Calculation Framework

Convert the last basic salary into a daily wage (basic salary ÷ 30)
Determine eligible service duration (excluding unpaid absence days where applicable)
Calculate the first 5 years using 21 days per year
Calculate any service above 5 years using 30 days per year
Apply the maximum cap if the total exceeds two years of wage

Practical UAE Examples (Quick Reference)

Example 1: 4 Years of Service

Basic salary: AED 6,000
Daily wage: 6,000 ÷ 30 = AED 200
Gratuity days: 21 × 4 = 84 days
Estimated gratuity: 84 × 200 = AED 16,800

Example 2: 7 Years of Service

Basic salary: AED 6,000
Daily wage: AED 200

First 5 years:
21 × 5 = 105 days → 105 × 200 = AED 21,000

Next 2 years:
30 × 2 = 60 days → 60 × 200 = AED 12,000

Total estimate: AED 33,000

Do’s and Don’ts (UAE HR Reality)

Do

• Use your last basic salary as the starting point
• Keep written records of unpaid leave or long absences
• Request a detailed final settlement breakdown from HR
• Cross-check your estimate before accepting final figures

Don’t

• Do not assume gratuity is based on total salary unless clearly stated
• Do not ignore the difference between allowances and basic wage
• Do not rely only on verbal confirmations
• Do not forget to confirm your last working day and notice period handling

Common Mistakes That Reduce Gratuity or Cause Disputes

• Using gross salary instead of basic salary
• Incorrect service duration
• Ignoring unpaid absence periods
• Misunderstanding pro-rata calculations
• Not checking if deductions are lawful and documented

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Frequently Asked Questions (FAQ)

1) Is gratuity paid if I worked less than 1 year in the UAE?
In most cases, gratuity is payable only after completing at least one year of continuous service.

2) Is gratuity calculated on basic salary or total salary?
In UAE HR practice, gratuity is commonly calculated on the last basic salary. Always confirm your contract.

3) Does unpaid leave affect gratuity?
Yes. Unpaid absence days are generally excluded from service duration.

4) How is gratuity calculated after 5 years of service?
Typically: 21 days per year for the first 5 years, then 30 days per year for years above 5.

5) Is there a maximum limit for gratuity in the UAE?
Yes. Gratuity is generally capped at two years of wage.

6) Can employers deduct amounts from gratuity?
Yes, but only lawful and documented dues. Always request a breakdown.

Important Disclaimer

This UAE Gratuity Calculator provides estimated values for planning and awareness only. It does not replace official advice from HR, MoHRE, or a qualified legal professional. For disputes, always seek official guidance and maintain proper employment records.

Conclusion: Protect Your Final Settlement with Knowledge

Gratuity is a major part of final settlement in the UAE. When you understand the formula, service rules, and salary structure, you reduce the risk of errors and disputes. Use this calculator for planning and always confirm your employment contract and company policy.

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