UAE End of Service Gratuity Calculator 2025

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

End of Service Gratuity (EOSB) is a key employee benefit in the UAE, but it’s also one of the most confusing parts of final settlement. Many employees don’t know how gratuity is calculated, what “basic salary” means, whether unpaid leave affects the total, or how partial years are treated.

This UAE Gratuity Calculator helps employees, supervisors, and HR teams estimate gratuity using the standard UAE labour law formula (first 5 years vs. after 5 years) and provides a clear breakdown of the result. Use it for planning, negotiation, and salary clarity.

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

UAE Gratuity Calculator (2025)

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

Gratuity is commonly calculated on basic salary, not allowances.
Unpaid absence days are generally not included when calculating service duration for gratuity.

What Is End of Service Gratuity in the UAE?

End of Service Gratuity (also called EOSB) is a statutory benefit payable to eligible employees at the end of their employment. It is a core part of final settlement for many private-sector workers in the UAE.

Who is generally eligible?

  • Employees who complete at least 1 year of continuous service.
  • Gratuity is calculated using the last basic wage and service duration.
  • Parts of a year may be calculated proportionately (pro-rata), subject to rules and records.

How Gratuity is Calculated (UAE Formula Explained Simply)

The UAE gratuity formula is typically based on 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 that structure and provides a transparent breakdown so you can understand how the estimate is built.

Step-by-Step Gratuity Calculation Framework

  1. Convert last basic salary into a daily wage: basic ÷ 30
  2. Determine eligible service duration (exclude unpaid absence days where applicable)
  3. Calculate the first 5 years using 21 days per year
  4. Calculate any service above 5 years using 30 days per year
  5. Apply cap if the gratuity exceeds two years’ wage

Practical UAE Examples (Quick Reference)

Example 1: 4 years service (first 5 years only)

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

Example 2: 7 years service (first 5 + after 5)

  • Basic salary: AED 6,000
  • Daily basic 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 your starting point.
  • Keep written records of unpaid leave or long absences (these may affect eligible service).
  • Request a final settlement breakdown from HR, including any deductions.
  • Cross-check your own estimate using this calculator before accepting a final figure.

Don’t

  • Don’t assume gratuity is calculated on total salary unless your contract clearly states otherwise.
  • Don’t ignore the difference between allowances and basic wage.
  • Don’t rely only on verbal confirmations for final settlement.
  • Don’t forget to confirm your last working day, notice period handling, and outstanding deductions.

Common Mistakes That Reduce Gratuity or Create Disputes

  • Using gross salary instead of basic salary in calculations
  • Incorrect service duration (not accounting for unpaid absence days)
  • Misunderstanding pro-rata calculations for partial years
  • Not checking if company deductions were lawful and documented

Related UAE HR & Salary Tools

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. If your contract specifies otherwise, confirm with HR.

3) Does unpaid leave affect gratuity?

Unpaid absence days are generally not included when calculating service duration for gratuity. Keep records for accuracy.

4) How is gratuity calculated for 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 and should not exceed two years of wage (often treated as 24 months of basic wage).

6) Can my employer deduct amounts from gratuity?

Employers may deduct lawful and documented dues (for example, confirmed liabilities). Always request a clear settlement breakdown.

Important Disclaimer

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

Conclusion: Use Gratuity Knowledge to Protect Your Final Settlement

Gratuity is a major part of final settlement in the UAE. When you understand the calculation structure (first 5 years vs. after 5 years), service rules, and salary base, you reduce the risk of errors and disputes. Use this calculator for planning and always confirm your contract terms with HR.

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