How to Calculate Gratuity in UAE for Limited Contract

Signing a limited contract in the UAE shouldn’t mean saying goodbye to your rightful end-of-service benefits! Gratuity, a mandatory reward for your dedication, applies to both unlimited and limited contracts, ensuring financial security even when your journey with an employer comes to an end. But navigating the calculation specifics can feel like deciphering ancient hieroglyphics. Worry not, intrepid employee! This comprehensive guide empowers you to unlock the mystery of gratuity with clarity and confidence.


Your Basic Salary:

Employment Period:


# From To Days Gratuity
Total Gratuity You Should Recieve

Earning Your Due: Who Qualifies for Gratuity in the UAE?

The good news? Most private-sector employees in the UAE, regardless of contract type, are entitled to gratuity after completing one year of service. This includes those on limited contracts, offering well-deserved financial recognition for your valuable contributions. So, breathe a sigh of relief, even if your time with a company has an endpoint.

Cracking the Code: Demystifying the Gratuity Calculation for Limited Contracts

Fear not the formulas! Calculating your gratuity for a limited contract in the UAE boils down to three key factors:

  • Basic Salary: This is your fixed monthly pay before any deductions.
  • Years of Service: This includes the full years you’ve completed, as well as any fractional months served.
  • Gratuity Days per Year: This depends on your length of service:
    • First 5 Years: You deserve 21 days of your basic salary for each year.
    • Beyond 5 Years: The reward gets sweeter! You’re entitled to 30 days of your basic salary for each year.

Putting it All Together: The Gratuity Equation for Limited Contracts

Now, for the magic formula! To calculate your gratuity, simply follow these steps:

  1. Identify your total years of service: Include both full years and any fractional months served (divide the number of months by 12).
  2. Separate your service into two periods: The first five years and any years beyond that.
  3. Calculate the gratuity for each period:
    • First 5 Years: Multiply your basic salary by 21 days and then by the number of years in this period. Divide the result by 30 (number of days in a month).
    • Beyond 5 Years: Multiply your basic salary by 30 days and then by the number of years exceeding five.
  4. Add the gratuity amounts from both periods: This is your total gratuity for your limited contract!


  • Partial Years Count: Don’t worry if you haven’t completed a full year. Your gratuity is proportionally calculated for any fractional months served.
  • Capped Maximum: While your service deserves recognition, your gratuity cannot exceed two years’ worth of your basic salary.

Empowering Resources for a Smooth Journey:

Navigating gratuity calculations can be a solo adventure, but helpful resources are your trusty companions:

  • Dubai Development Authority’s Online Gratuity Calculator: A user-friendly tool that guides you through the steps and delivers your personalized gratuity estimate.
  • Ministry of Human Resources and Emiratisation (MoHRE) Website: This official platform provides detailed information on UAE labor laws, including gratuity regulations.

Top Tips for Calculating Your Limited Contract Gratuity with Confidence:

  • Maintain meticulous records: Keep copies of your employment contracts, payslips, and any relevant documents for accurate calculations.
  • Seek clarity from your employer: If any aspect of gratuity calculation seems unclear, don’t hesitate to ask your HR department for assistance.
  • Utilize online resources: Leverage the DDA calculator and MoHRE website to double-check your calculations and stay informed about your rights.


Understanding your gratuity entitlements for a limited contract in the UAE empowers you to claim your rightful rewards. With this guide as your compass, you can confidently navigate the financial terrain and secure your well-being at the end of your contract. Remember, your dedication deserves recognition, and gratuity is your well-earned treasure waiting to be unearthed. So, go forth, calculate with confidence, and enjoy the peace of mind knowing your contributions are valued in the vibrant UAE work environment.


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