Accurate & Simplified Gratuity Calculator for UAE: Dubai & Abu Dhabi

Are you an employee in the UAE wondering about the benefits you’ll receive when you leave your job? One of the most important perks is gratuity. It’s a payment from your employer to thank you for your service. But many employees aren’t sure how gratuity works.

Don’t worry, we’ve got you covered. We’ll explain the UAE’s gratuity rules and show you how to calculate your gratuity. We’ll also discuss factors that can affect your gratuity amount.

So, whether you’re about to quit or just curious about your rights, let’s dive into the world of UAE gratuity.

Who is Eligible for Gratuity in the UAE?

If you’ve worked for an employer in the UAE for at least one year, you’re likely eligible for gratuity, which is a bonus payment as a thank-you for your service.

Here’s a quick guide on who qualifies:

• UAE Nationals and Expats
• Men and Women
• Employees with Limited or Unlimited Contracts
• Full-time and Contract Employees
• Government and Private Sector Workers
• Those who have resigned, been terminated, or completed their contract
• Retired Employees

Important: If you’ve worked for less than a year, you won’t be eligible for gratuity.

Knowing your rights when it comes to gratuity in the UAE is crucial if you’re working here.

Understanding Gratuity Calculation Methods in UAE Employment Contracts

Our gratuity calculator in Dubai helps you estimate your gratuity amount. However, if you want to understand how to calculate gratuity manually, here are the guidelines for both limited and unlimited contract types.

Gratuity Calculation for Limited Contract Type

If you're on a limited contract, you can estimate your gratuity using the following formula:

1. Calculate Your Daily Salary:
   • Divide your basic salary by 30.
   • Formula: Basic Salary ÷ 30 = Daily Salary
   • Example: If your basic salary is 9,000 Dirhams:
     • Calculation: 9,000 ÷ 30 = 300 Dirhams per day.
2. Calculate Your Yearly Gratuity:
   • Multiply your daily salary by 21 to find your gratuity for one year.
   • Formula: Daily Salary × 21 = Yearly Gratuity
   • Example:
     • Calculation: 300 × 21 = 6,300 Dirhams.
3. Calculate Total Gratuity for Your Service Years:
   • For 1 to 5 years of service, multiply your yearly gratuity by the number of years worked.
   • Formula: Yearly Gratuity × Years of Service = Total Gratuity
   • Example: For a 3-year contract:
     • Calculation: 6,300 × 3 = 18,900 Dirhams.
4. For More Than 5 Years of Service:
   • Multiply your basic salary for the 6th year and beyond.
   • Example: If you served for 7 years:
     • Calculation: 9,000 × 2 = 18,000 Dirhams (for the 6th and 7th years).
5. Total Gratuity Calculation:
   • Add the gratuity from the first five years to the gratuity from the 6th year onward.
   • Formula: Gratuity of First 5 Years + Gratuity of 6th Year Onward = Total Gratuity
   • Example: 18,900 + 18,000 = 36,900 Dirhams.

Gratuity Calculation for Unlimited Contract Type

For an unlimited contract, gratuity calculations are similar, but if you resign, follow these steps:

1. Calculate Your Daily Salary (same as above):
   • Example: For a basic salary of 9,000 Dirhams:
     • Calculation: 9,000 ÷ 30 = 300 Dirhams per day.
2. Calculate Your Yearly Gratuity (same as above):
   • Calculation: 300 × 21 = 6,300 Dirhams.
3. For Service Tenure Between 1 to 3 Years:
   • Calculate one-third of the yearly gratuity.
   • Formula: Yearly Gratuity × (1/3) = Gratuity for 1 Year
   • Example:
     • Calculation: 6,300 × (1/3) = 2,100 Dirhams.
   • Multiply this amount by your number of service years.
   • Example: For 2 years:
     • Calculation: 2,100 × 2 = 4,200 Dirhams.
4. For Service Tenure Between 3 to 5 Years:
   • Calculate two-thirds of the yearly gratuity.
   • Formula: Yearly Gratuity × (2/3) = Gratuity for 1 Year
   • Example:
     • Calculation: 6,300 × (2/3) = 4,200 Dirhams.
   • Multiply this by your number of service years.
   • Example: For 4 years:
     • Calculation: 4,200 × 4 = 16,800 Dirhams.
5. For Resignation After More Than 5 Years:
   • Your gratuity calculation follows the same method as that for a limited contract employee.

Calculating Your UAE Gratuity: Key Factors

Curious about how much gratuity you’ll receive in the UAE? Let’s break down the main factors that affect your payout.

1. Your Length of Service

• Less than a year: No gratuity.
• 1-5 years: The rules differ for limited and unlimited contracts.
• 5+ years: You get a higher gratuity rate after five years.

2. Your Contract Type

• Limited Contract:
  • 1-5 years: You’ll receive 21 days' salary for each year.
  • 5+ years: 21 days' salary for the first five years, and 30 days for each year after that.
• Unlimited Contract:
  • Termination: Same as the limited contract.
  • Resignation: You may receive less gratuity if you resign early.

3. Other Key Rules

• Maximum gratuity: The total gratuity can’t exceed two years' basic salary.
• Calculation: It’s based on your last basic salary.
• Allowances: Only your basic salary is used for gratuity calculations, not any extra allowances.

If you want to estimate your exact gratuity amount quickly, use our gratuity calculator.

Maximize Your Gratuity: Tips for UAE Employees

Want to make the most of your gratuity? Here are some practical tips:

1. Know Your Rights: Carefully read your employment contract, especially the section about gratuity. Understanding your rights is the first step to maximizing your benefits.
2. Complete Your Contract: If you have a limited contract, aim to finish the full term. This can help you secure the maximum gratuity payout.
3. Time Your Resignation: If you’re unhappy at work, consider timing your resignation to ensure you receive the highest gratuity possible.
4. Stay Informed: Keep up to date with changes in UAE labor laws. Understanding new regulations can help you protect your rights.
5. Use a Gratuity Calculator: Our gratuity calculator can provide a quick estimate of your potential payout. It’s a handy tool for planning.

By following these tips, you can help ensure you receive the gratuity you deserve

Who Gets Gratuity in the UAE?

Only expatriate employees in the UAE are eligible for gratuity. This is because UAE nationals receive a national pension plan instead.

When Do You Earn Gratuity?

You start earning gratuity as soon as you start working. However, you only get it when you leave your job, whether you quit or get fired. But you need to have worked for at least one year.

Is There a Limit to Gratuity?

Yes, there is. The maximum gratuity you can get is two years' worth of your basic salary. This doesn't include any extra money you might earn, like allowances.

How is Gratuity Calculated?

Your gratuity is based on how long you worked and your last salary. It's calculated like this:

• First 5 years: 21 days of your basic salary per year.
• More than 5 years: 30 days of your basic salary per year.

Can Your Employer Deny Gratuity?

Yes, in a few cases:

• Bad Behavior: If you did something bad at work, like stealing or being violent.
• No Contract: If you can't prove you had a job.
• Less Than a Year: If you didn't work for at least one year.

Disclaimer:

Our gratuity calculator is designed to help you estimate your expected gratuity, but it is not a legal tool. The calculations are based on UAE labor laws and the information you provide. While it aims to give you a close estimate, it may not be 100% accurate. Factors such as the benefits you received during your employment, the terms of your employment contract, or missing information can lead to some calculation errors.

Gratuity Calculator Dubai is not responsible for errors in the estimates, and these calculations should not be used for legal decisions. We strongly recommend consulting a lawyer for precise legal advice or action.