How to Calculate Gratuity in UAE

Gratuity, also known as end-of-service benefits, is your well-deserved reward for putting in the hours in the UAE. But figuring out its exact amount can feel like trying to solve a Rubik’s Cube blindfolded. Don’t worry, this guide will be your trusty torch, shining light on every corner of the calculation process.


Your Basic Salary:

Employment Period:


# From To Days Gratuity
Total Gratuity You Should Recieve

Who Gets Gratuity?

Not everyone qualifies for this sweet bonus. The basic rule is: work in the UAE for at least one year at the same company, and you’re entitled to gratuity. Whether you have an unlimited or limited contract doesn’t matter – you still deserve your reward.

The Magical Formula:

Now, let’s crack the code! Calculating gratuity depends on how long you’ve been with the company:

  • Less than 5 years: Imagine your basic salary is like a giant cake, and each day’s worth of pay is a slice. To find your daily wage, simply divide your cake (salary) into 30 equal slices. Now, multiply that daily slice by 21, sprinkle in your years of service, and voila! You’ve got your basic gratuity amount.
  • 5 years or more: Here’s where things get a little spicier. For the first five years, use the same recipe as before. But for every year after that, grab a bigger slice of cake – 30 days’ worth! Add those up, and then mix them with the smaller slices from your first five years. That’s your delicious gratuity feast!

Important notes:

  • Just like you can’t eat two whole cakes at once, your gratuity can’t be more than your salary for two years. So, if your calculation exceeds that limit, just clip it back down to two years’ worth.
  • Feeling overwhelmed? Don’t fret! Plenty of free online calculators can do the math for you in a flash.

Beyond the Numbers:

Life is rarely straightforward, and neither is gratuity calculation. Here are some sticky situations you might encounter:

  • Probation period: Don’t fret if you’re still on probation. Your gratuity clock starts ticking once you complete it.
  • Partial years: Did you join mid-year? No problem! Divide your service time into months and calculate accordingly.
  • Salary changes: Your gratuity is based on your latest salary, so any raises will boost your bonus.
  • Bonuses and allowances: These goodies don’t usually 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 you don’t understand.

Claiming Your Reward:

Knowing your gratuity is one thing, getting it in your hands is another. Keep these resources handy:

  • Ministry of Human Resources and Emiratisation (MoHRE): Their website is your go-to for official rules and regulations.
  • Labor courts: If you have any disputes with your employer, these courts can help settle things.
  • Lawyers: For complex situations, seeking legal advice can be your best bet.

Congratulations! You’ve conquered the maze of gratuity calculations. Now, sit back, relax, and enjoy the fruits of your labor. Remember, your knowledge and confidence are your most valuable assets in navigating the financial landscape of the UAE. Go forth and claim your rightful reward!


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