Many employees in the UAE want to know how gratuity is calculated, but the rules can feel confusing at first. However, once you understand the basic formula under UAE Labour Law, gratuity calculation becomes simple and clear.
This guide explains how to calculate gratuity in UAE, including Dubai, using real rules approved by MOHRE (Ministry of Human Resources & Emiratisation).
What Is Gratuity in UAE?
Gratuity is an end-of-service benefit paid by an employer when an employee leaves the job after completing at least one year of continuous service.
It applies to:
- Limited contracts
- Unlimited contracts
- Employees working across Dubai and the UAE
Basic Rule for Gratuity Calculation in UAE
Before calculating gratuity, remember these important points:
- Gratuity is based on basic salary only
- Allowances (housing, transport, overtime) are not included
- Maximum gratuity cannot exceed two years’ basic salary
How Is Gratuity Calculated in UAE?
Gratuity calculation depends on years of service.
- Gratuity for 1 to 5 Years of Service
If you have worked between 1 and 5 years, the calculation is:
21 days of basic salary for each year
Formula:
(Basic Salary ÷ 30) × 21 × Number of Years
- Gratuity for More Than 5 Years
If you have worked more than 5 years, then:
- First 5 years → 21 days per year
- After 5 years → 30 days per year
Formula:
First 5 Years: (Basic Salary ÷ 30) × 21 × 5
Remaining Years: (Basic Salary ÷ 30) × 30 × Remaining Years
How to Calculate Gratuity in Dubai (Same Rules)
Many people ask how to calculate gratuity in Dubai.
The answer is simple:
- Dubai follows the same UAE labour law rules
So the calculation is exactly the same in all emirates.
Example: Gratuity Calculation in UAE
Example 1: Gratuity for 2 Years
If:
- Basic Salary = AED 3,000
- Service = 2 years
Calculation:
3000 ÷ 30 = 100
100 × 21 × 2 = AED 4,200
So, gratuity for 2 years in UAE = AED 4,200
Example 2: Gratuity for 6 Years
If:
- Basic Salary = AED 5,000
- Service = 6 years
Calculation:
First 5 years:
5000 ÷ 30 = 166.67
166.67 × 21 × 5 = AED 17,500
Remaining 1 year:
166.67 × 30 × 1 = AED 5,000
Total Gratuity = AED 22,500
How Much Gratuity in UAE Can You Get?
Your gratuity amount depends on:
- Basic salary
- Total years of service
- Contract type
- Reason for leaving (resignation or termination)
However, under UAE law:
✔ Maximum gratuity = 2 years’ basic salary
Computation of Gratuity: Manual vs Calculator
Manual computation of gratuity can be risky because:
- Small mistakes change the final amount
- Labour law updates may be missed
That is why many employees prefer using a reliable UAE gratuity calculator to get quick and accurate results based on MOHRE rules.
How to Calculate Your Gratuity in UAE Easily
Instead of doing manual calculations, you can:
- Enter your basic salary
- Select years of service
- Choose contract type
And instantly see your end-of-service gratuity estimate.
This method is especially useful for employees in Dubai and across the UAE who want fast and clear results.
Important MOHRE Notes
- Gratuity is payable only after 1 full year
- Unpaid leaves may affect calculation
- Misconduct cases may reduce or cancel gratuity (as per law)
Always follow official UAE labour law guidelines for final settlement.
Final Thoughts
Understanding how gratuity is calculated in UAE helps employees plan their future better. Whether you are calculating gratuity for 2 years, 5 years, or more, the rules remain clear when you follow MOHRE guidelines.
For accurate results, using a trusted gratuity calculator is the easiest and safest option.