Calculate your UAE end-of-service gratuity (EOSB) for limited and unlimited contracts under UAE Labour Law — accurate 2024/2025 calculation.
UAE End-of-Service Gratuity Calculator
Gratuity Amount
Daily Wage
Calculation Basis
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How to Calculate UAE Gratuity (End-of-Service Pay)
Under UAE Federal Labour Law (Federal Decree-Law No. 33 of 2021), every employee who completes at least one year of continuous service is entitled to end-of-service gratuity. The calculation is based on the basic salary only — housing, transport, and other allowances are excluded.
UAE Gratuity Formula (2024/2025)
First 5 years: 21 calendar days' basic salary per year of service
Beyond 5 years: 30 calendar days' basic salary per year of service
Daily wage = Basic Monthly Salary ÷ 30
Maximum cap: Total gratuity cannot exceed 2 years' total basic salary
Resignation Deductions (Unlimited Contract)
Less than 1 year: No gratuity
1–3 years: 1/3 of the calculated gratuity
3–5 years: 2/3 of the calculated gratuity
5+ years: Full gratuity
Under the 2022 Labour Law reform, unlimited contracts are being phased out. New contracts from February 2022 onwards are all limited (fixed-term, maximum 3 years, renewable). If terminated without cause on a limited contract, you receive full gratuity regardless of years served.
Gratuity for Freezone Employees
Employees in DIFC, ADGM, and other freezones may fall under different regulations. DIFC has its own Employee Workplace Savings (DEWS) scheme which replaced traditional gratuity for DIFC employees from February 2020. Always verify with your HR department which law applies.
Frequently Asked Questions
Gratuity is calculated on basic salary only — not total package. Housing allowance, transport allowance, food allowance, commissions, and bonuses are excluded. If your offer letter bundles everything into one 'total salary' figure, ask your HR to confirm the basic component specifically.
On an unlimited contract, resignation before 1 year means zero gratuity. Between 1–3 years you get 1/3, between 3–5 years you get 2/3, and after 5 years you get the full amount. Under the new 2022 Labour Law, most new contracts are limited (fixed-term), and resigning from a limited contract after completing it gives you full gratuity.
Gratuity is a protected entitlement under UAE law. If a company cannot pay, employees can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE). The UAE has a Wage Protection System (WPS) and courts generally prioritize unpaid wages and gratuity as preferred creditors.
The UAE has no personal income tax, so gratuity is received completely tax-free. There are no deductions for social security, pension, or income tax from your end-of-service payment. This is one of the key financial benefits of working in the UAE.