How to calculate gratuity in UAE, plus rules you must know

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How to calculate gratuity in UAE, plus rules you must know

Gratuities, or end-of-service benefit, are lump sums given to employees in the UAE after they have ended their employment contract.

So, how do you know if you qualify for a gratuity and how much is owed to you? Here are answers to your frequently asked questions.

Who are entitled to gratuity?

Employees who have resigned from their job or have been terminated from their job for reasons that are not a violation of the UAE’s labour laws are entitled to receive gratuity. They must have completed at least one year of continuous service.

How is gratuity calculated in the UAE?

Gratuity is calculated on the basis of your last basic salary. The amount does not include allowances, like housing and transport, that are included in your salary.

For employees serving less than 1 year: No gratuity

For employees serving more than 1 year but less than 5 years: Gratuity pay equivalent to 21 days’ basic salary multiplied by each year of work

For employees serving more than 5 years: Gratuity pay equivalent to 30 days’ basic salary multiplied by each year of work

What is the maximum gratuity I can receive?

In all cases, the gratuity shall not exceed the person’s total salary for two years.

Does the UAE government have an online gratuity calculator?

Yes. You can use the Gratuity Calculator by Dubai Development Authority to calculate your gratuity. Go to

Are housemaids or domestic workers entitled to gratuity?

Under the UAE Federal Law 15 of 2017, gratuity for domestic workers shall be calculated on the basis of the salary due for 14 days per year of service. The gratuity shall be paid to the domestic worker upon termination of the employment contract.

However, an amended law that came into effect in December 2022 did not set out specific entitlement to the end of service gratuity. The law referenced a future decision by the UAE Cabinet on the matter, however, the UAE Cabinet decision that came out on January 2023 also did not make any references to the entitlement of end of service gratuity for domestic workers. Therefore, there is currently no expressed legal authority supporting gratuity entitlement for domestic workers.

Do employees with limited-term employment contract get gratuity?

Employees with limited-term employment contract must complete at least five years of service, otherwise they are not entitled to gratuity. A limited-term employment contract has a fixed start and end date. It is not commonly used in the UAE.

How is gratuity calculated for employees with part-time contracts?

Under the UAE law, gratuity for employees with part-time contracts or other types of work arrangements is calculated based on the number of work hours in the employment contract per year. This is then divided by the number of working hours in the full-time contract per year, then multiplied by 100 to get the percentage on which gratuities must be calculated. The percentage will then be multiplied by the gratuity value for the full-time contract. Part-time workers are not entitled to gratuity if their employment is less than one year.

Can my employer deduct my gratuity if I owe money to the company?


How soon will I receive my gratuity?

The gratuity must be paid to you not later than 14 days from the end date of your employment contract.

What if my employer failed to pay my gratuity?

You can file a complaint against your employer at the Ministry of Human Resources and Emiratisation (MoHRE).

Will absences without pay be included in gratuity calculation?

No. According to MoHRE, unpaid leave days or any absence without pay will not be included in the final gratuity calculation.

ICA/Expat Media

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