UAE Gratuity Calculator

Under UAE Labour Law: 21 calendar days of basic salary for each of the first 5 years of service, then 30 calendar days for each year thereafter. The 'daily basic salary' is your monthly basic / 30. Total gratuity is capped at 2 years' total gross pay. Example: 7 years of service at AED 12,000 basic = (21 × 5 × 400) + (30 × 2 × 400) = AED 42,000 + AED 24,000 = AED 66,000 gratuity.

Only the 'basic' component of your salary — NOT allowances. So if your total monthly compensation is AED 20,000 (AED 12,000 basic + AED 5,000 housing + AED 3,000 transport), gratuity is calculated on the AED 12,000 only. Most UAE contracts set basic at 50-70% of total. Some employers deliberately structure low basic to reduce gratuity liability — check your offer letter carefully.

All employees in the UAE private sector with at least 1 year of continuous service. Domestic workers under Federal Decree 9/2022 also qualify with separate rules. UAE nationals are usually NOT subject to gratuity — they get GPSSA pension benefits instead. Free zones (DIFC, ADGM) have their own gratuity systems; DIFC uses the DEWS (DIFC Employee Workplace Savings Scheme) since 2020 — a monthly employer contribution similar to 401(k) instead of lump sum on exit.

Yes — under the current UAE Labour Law (Federal Decree-Law 33/2021, effective 2022), gratuity is paid regardless of whether you resign or are terminated, as long as you've completed at least 1 year. The previous distinction (resignation reducing gratuity) was abolished. Gratuity is calculated at your last basic salary at the time of separation.

Article 51 of the UAE Labour Law caps total gratuity at 24 months of the employee's gross salary. This protects employers from disproportionate liabilities for very long-tenured employees. For someone earning AED 20k/month total with 30 years' service, gratuity would calculate to ~AED 200k but get capped at ~AED 480k (24 × 20k). The cap rarely affects mid-career employees.

Almost certainly not. Even for high-earning expats with 20+ years of service, gratuity typically caps at 2 years' salary. That's a useful lump sum but nowhere near enough to fund retirement. UAE-based expats need additional retirement savings: international SIPP (UK), maxed contributions back home, brokerage accounts (Interactive Brokers, Saxo), or property investment. Many also keep contributing to their home country pension while non-resident.

DEWS (DIFC Employee Workplace Savings Scheme) replaced traditional gratuity for DIFC-based employees in 2020. Employers pay monthly contributions (~5-9% of salary) into an investment account in your name — similar to 401(k)/Super. You can also voluntarily contribute. At end of employment, you receive the full account balance plus growth. ADGM has a similar system. Some employers in the broader UAE voluntarily adopt DEWS-style schemes for retention.

Common options: (a) International brokerage accounts (Interactive Brokers, Saxo, Lightyear) — invest in ETFs/stocks globally; (b) UAE-based brokerages like Sarwa, Baraka, ADCB; (c) Property — rental in your home country or UAE; (d) UK SIPP (for UK nationals), Indian NPS (for Indian expats), AU super (for Australians, with constraints); (e) Diverse fixed income via UAE banks. The gratuity is tax-free in the UAE.