Knowing how to calculate your gratuity accurately is crucial to avoid any confusion or misunderstandings. The Gratuity Calculator For UAE is a valuable tool that can help you determine the amount you should receive based on your years of service and salary. In this article, we will also guide you through using the gratuity calculator and provide essential information, tips, and Rules to ensure you receive your rightful gratuity.

Gratuity Calculator UAE

Gratuity Amount AED:

Disclaimer: The purpose of this gratuity calculator is solely to provide UAE employees with an approximate estimation of their gratuity amount. It holds no legal validity and is based on the most common employment scenarios under UAE Labor Law. Please be aware that this calculator only considers the gratuity calculation for the basic salary corresponding to the respective years of service. It does not encompass other end-of-service benefits or factor in elements such as unused leave pay, air tickets, notice compensation, and others. For a comprehensive calculation of all end-of-service benefits tailored to your specific case, it is advised to seek guidance from a qualified professional. ebs disclaims any responsibility for errors that may occur in the calculation of your gratuity amount using this calculator.

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How To Calculate Gratuity UAE By LAW?

Definition of Gratuity

Gratuity, also commonly referred to as a tip, is a sum of money given voluntarily by a customer to an employee in addition to the payment for goods or services rendered. It is a way for customers to show appreciation for exceptional service or to acknowledge the employee’s efforts.

While service gratuity is not mandatory, it has become customary in many industries, particularly in the service sector. The gratuity entitlements amount is usually a percentage of the total bill, with the standard range being 15% to 20%. In some countries, gratuity may be included in the bill as a service charge; in others, it is left to the customer’s discretion.

For your ease, The Gratuity Calculator is a tool to help calculate the amount of gratuity that should be paid by UAE law. The country’s labour laws are pretty complex, so the service calculator can accurately estimate your service entitlements quickly and easily.

Overview of UAE Law on Gratuity

The UAE Law on Gratuity entitlement is an important aspect of employment regulations in the United Arab Emirates. Gratuity refers to a lump sum payment that an employer is legally required to provide to an employee upon the termination of their employment contract.

This payment is based on the employee’s length of period of service and their final salary. The UAE Labor Law outlines the specific rules and calculations for gratuity pay, ensuring that employees are fairly compensated for their years of service. Understanding the overview of UAE Law on Gratuity is essential for both employers and employees to ensure compliance and fair treatment in the workplace.

Eligibility of Employees for Gratuity Payment

Gratuity payment is a significant employee benefit that provides financial security to employees upon their retirement, resignation, or termination. It is a lump sum paid by the employer as a token of appreciation for the employee’s long-term service. The eligibility criteria for gratuity entitlement payment vary from country to country and may also depend on the employment laws and regulations in place. Generally, employees who have completed a minimum number of years of service, such as five or ten years, are eligible for gratuity payment.

If an employee decides to quit before the end of their set term, it could have negative effects on the employer, such as a labor prohibition, a loss of labor rights, or potential compensation.

However, conditions such as continuous employment, contract type, and company policies may also influence an employee’s eligibility for gratuity payment. Both employers and employees need to be aware of and adhere to the eligibility requirements in order to ensure that gratuity payments are made fairly and on time. Unpaid days off from work will not be factored into the calculation of the service period.

Types of contract:

Limited contracts: In the United Arab Emirates, gratuity is calculated by law for employees employed on a limited contract basis. A limited time contract is a type of employment agreement in which an employee agrees to work for an employer for a specified period of time, and at the end of that period, the employee will receive a gratuity payment.

Unlimited contract: In the United Arab Emirates (UAE), gratuity is calculated based on the laws set forth by the Ministry of Human Resources and Emiratisation. Employees with an ‘unlimited’ contract are entitled to a gratuity payment at the end of their service by Article 132 of UAE Federal Labour Law No. 8 of 1980 (as amended).

If your contract is infinite, the amount of your gratuity will depend on whether you quit your job or were fired. An unlimited contract only includes a start date. When considering an offer You should use a gratuity calculator to obtain correct figures after these contracts expire.

Private Sector Employee Eligibility

Private-sector employee eligibility refers to the criteria and requirements that individuals must meet in order to be eligible for employment in the private sector. These eligibility requirements may vary depending on the specific industry, company, and job position. Generally, private-sector employers consider factors such as education, skills, experience, and legal status when determining the eligibility of potential employees.

Private-sector employers may also have specific requirements related to background checks, drug testing, and professional certifications. It is important for individuals seeking employment in the private sector to be aware of and meet these eligibility requirements to increase their chances of securing a job in this sector.

Public Sector Employee Eligibility

Public sector employee eligibility refers to the criteria and requirements that individuals must meet in order to be considered for employment in the public sector. The public sector includes government agencies, departments, and organizations at various levels, such as local, state, and federal.

These eligibility requirements typically include educational qualifications, relevant work experience, citizenship or residency status, and any specific skills or certifications needed for the particular job. Ensuring that employees meet these eligibility criteria helps to maintain the integrity and professionalism of the public sector workforce and ensures that individuals with the necessary qualifications and abilities are hired for these important roles.

Foreign Worker Eligibility

Any expatriate worker Eligibility refers to the criteria and requirements determining whether an individual from another country is eligible to work in a specific country. These eligibility criteria may include factors such as the individual’s immigration status, education, skills, work experience, language proficiency, and any specific requirements set by the government or relevant authorities.

Determining the eligibility of foreign workers is essential for ensuring that the workforce remains regulated, skilled, and aligned with the needs of the country’s economy. This process helps to protect local job opportunities, maintain national security, and ensure that foreign workers contribute positively to the host country’s development.

Other Requirements to Receive Gratuity Payment

To receive employee gratuity payments, specific requirements need to be fulfilled. First, an employee must have completed several years of service with the company, usually five years or more. Second, the employee must have a valid reason for leaving the company, such as retirement, resignation (with or without notice period), or termination due to health reasons. Third, the employee must have a clean record with the company.

This page provides information on the provisions and calculations for end-of-service benefits for workers in the private sector in the UAE, including UAE nationals and expatriates working under various types of contracts and work arrangements. And they have not been involved in any misconduct or disciplinary issues.

Finally, the employee must have followed the proper procedures for applying and requesting the entire gratuity payment, including submitting necessary documents and forms to the employer. Meeting these requirements ensures that employees are eligible to receive the gratuity payment they are entitled to.

Manual gratuity calculation according to UAE law.

Calculating gratuity with the Gratuity Calculator By UAE law is essential for both employers and employees. Gratuity is a statutory benefit provided to UAE employees at the end of their employment tenure. .

Elements of Gratuity calculation is further broken down into 3 tiers:

1/3 (1-3 years) of continuous service

2/3 (3-5 years) of continuous service

5 five years The employee has provided continuous service.

If an employee is terminated, then only 2 tiers remain: 1-5 years of service and 5 years or more time period of employment As an employee progresses through these tiers, the calculation for their payment changes.

The gratuity for employees working with 1-3 years of experience is determined by multiplying 1/3 of their basic salary (doesn’t include any additional benefits) or daily basic wage by 21 days of gratuity pay for each year worked.

It is calculated based on the employee’s 1-5 years basic salary or daily wages and the years they have worked for the company. To calculate maximum gratuity, employers need to determine the total number of years of service, divide it by three, and multiply it by the employee’s last drawn basic salary.

This calculation ensures that compensation for employees is fair for their years of service and provides them with financial security upon leaving their jobs. Days of absence unpaid leave will not be included in the calculation of total service time.

Understanding how to do calculations for employer gratuity pay by UAE law is crucial for employers and employees to ensure compliance with labour regulations and avoid any disputes or misunderstandings.

Let’s use gratuity calculation for the example:

Suppose you have worked for four years and nine months, with a basic salary of Dh 6,500. Here is how you can calculate the gratuity:

Gratuity for four years: Dh 6,500 ÷ 30 x 21 x 4 = Dh 9,100

Gratuity for nine months: Dh 6,500 ÷ 12 ÷ 30 x the number of days in the nine months.

Please note that the number of days in the nine months should be calculated based on the actual number of days.

Employers are required to pay compensation and meet all other obligations under the UAE Labour Law within 14 days of the termination of a limited-term contract.

How can the Gratuity Calculator help you? Just fill in the inputs above in the Gratuity calculator for UAE and get the amount instantly.

Service Benefits Under the Labour Law (UAE Federal Law No. 8/1980)

Under the “Labour Law in the UAE“, employees are entitled to various benefits and protections. These benefits include the right to a written employment contract, which outlines the terms and conditions of employment.

Additionally, employees are entitled to fair daily wages, including overtime pay, annual leave, sick leave, and end-of-service benefits. The Labour Law also provides workplace safety and health provisions, ensuring that employers are obligated to provide a safe working environment. Furthermore, the law prohibits discrimination in the workplace based on race, gender, religion, or nationality. These service benefits provided under the Labour Law aim to protect the rights and well-being of employees in the UAE.


What is the formula for calculating gratuity in the UAE?

Gratuity = (Basic Salary ÷ 30) x 21 x (Years of Service)
Example: If an employee’s Basic Salary is 3000 AED and they have worked for 2 years, the gratuity would be calculated as follows:
Gratuity = (3000 ÷ 30) x 21 x 2 = 4200 AED.

What is the calculation of gratuity in the United Arab Emirates?

Gratuity = (Basic Salary ÷ 30) x 21 x (Years of Service)

Can I withdraw my gratuity amount while working in the UAE?

You cannot withdraw your gratuity amount while working in the UAE. As per the UAE Labor Law, gratuity is payable to employees only at the end of their employment period.

How is gratuity calculated for part-time employees in the UAE?

The UAE Labour Law does not have a specific formula for calculating gratuity for part-time employees. The calculation may vary based on the employment contract and company policies. Check this article for contract-type-based calculations.

What is the maximum UAE gratuity?

The maximum gratuity amount in the UAE is equivalent to two years’ worth of the employee’s basic salary.

Do I get a gratuity if I resign?

Yes, If You Have Completed At Least One Year Of Continuous Service With Your Employer, You Are Entitled To Receive Gratuity When You Resign From Your Job In The UAE.

What is the latest rule for gratuity in the UAE?

As per the new UAE Labor Law, all employment contracts are now limited to a maximum of five years. Gratuity is calculated at 21 days of basic salary per year of service in the company. If an employee has more than five years of service, they would be entitled to 30 days of gratuity for each additional year beyond the five-year mark.

Is gratuity included in the monthly salary?

No, gratuity is not added to the regular monthly salary. It is a separate benefit given to employees based on their duration of service. If an employee has served between three to five years, the gratuity is calculated at 21 days of basic salary per year.

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