How to Calculate Gratuity in UAE for Unlimited Contract

Congratulations! You’ve landed an exciting opportunity in the UAE with an unlimited contract. Along with the amazing career prospects comes that sweet cherry on top – gratuity. But figuring out its exact amount can feel like deciphering hieroglyphics. Don’t worry, this guide will be your Rosetta Stone, breaking down the calculation process into bite-sized, easy-to-understand pieces.


Your Basic Salary:

Employment Period:


# From To Days Gratuity
Total Gratuity You Should Recieve

Who’s Eligible?

Before we dive into the numbers, let’s make sure you’re eligible for that end-of-service benefit. The good news is, if you have an unlimited contract in the UAE and have worked for at least one year at the same company, you’re entitled to gratuity! No matter your job title or experience level, this reward awaits.

The Simple Formula:

Now, let’s crack the gratuity code, specifically for those awesome unlimited contracts:

  1. Imagine your monthly salary as a giant pizza. Each slice represents one day’s worth of pay. To find your daily wage, simply divide your pizza (monthly salary) into 30 equal slices.
  2. Next, grab your calendar and count the years you’ve been with the company. This is the number of pizzas you’ve delivered, metaphorically speaking.
  3. Multiply your daily wage by 21 and then by your years of service. Boom! You’ve got your basic gratuity amount. Think of it as the extra toppings on your pizza reward.

Bonus Round: 5+ Years of Service

Stuck around for more than five years? You deserve an even bigger slice of the gratuity pie! For each year after the fifth, instead of the 21-day slice, grab a 30-day slice from your salary pizza. Add these extra-large slices to your basic gratuity amount, and enjoy the delicious taste of your loyalty being rewarded.

Important Notes:

  • Just like you can’t eat two pizzas at once, your gratuity can’t be more than your total salary for two years. So, if your calculation goes beyond that, simply trim it down to match the two-year limit.
  • Feeling overwhelmed? Don’t fret! Plenty of free online gratuity calculators can do the math magic for you in a flash. Just plug in your numbers and voila!

Beyond the Numbers:

Life (and gratuity calculations) can be messy. Here are some common situations you might encounter:

  • Probation period: Don’t worry, your gratuity clock starts ticking once you successfully complete your probation.
  • Partial years: Joined mid-year? No problem! Divide your service time into months and calculate accordingly. Every slice counts!
  • Salary changes: Any raises you get bump up your gratuity, making your reward even sweeter.
  • Bonuses and allowances: These extras usually don’t count towards your gratuity, but check your contract to be sure.
  • Employer deductions: Your company can only deduct certain things from your gratuity, like unpaid loans or disciplinary fines. Always question any deductions that seem fishy.

Claiming Your Reward:

Knowing your gratuity is one thing, getting it in your hands is another. Here are some handy resources to help you navigate the process:

  • Ministry of Human Resources and Emiratisation (MoHRE): Their website is your official guide, packed with rules and regulations.
  • Labor courts: If you have any disputes with your employer regarding gratuity, these courts can help resolve the issue.
  • Lawyers: For complex situations, seeking legal advice can be your best bet. Remember, knowledge is power!

Feel free to share this guide with your fellow UAE colleagues, and let’s spread the gratuity knowledge together!


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