Online Gratuity Calculator UAE 2025 (Updated with MOHRE)
Gratuity, or end-of-service benefits, is a key part of employment in the UAE. It’s a reward paid by employers to employees when their job ends, provided specific conditions are met. Understanding how gratuity is calculated and knowing your rights under UAE Labour Law is essential for a smooth exit process.
Gratuity Calculator UAE
This guide will cover everything from using the gratuity calculator UAE to understanding different contract types and eligibility rules.
What is Gratuity in the UAE?
Gratuity, known as مكافأة in Arabic, is a legal payment offered to employees who complete at least one year of continuous service. It’s based on your basic salary, service length, and contract type. For domestic helpers, housemaids, and private-sector employees, gratuity rules are outlined under UAE Labour Law.
Why Use a Gratuity Calculator UAE?
Calculating gratuity manually can be confusing and prone to mistakes. A gratuity calculator UAE simplifies the process by giving you an accurate estimate within minutes. Here’s what you need to input:
- Basic Salary: Your last drawn basic salary (excluding allowances).
- Service Period: The number of years you’ve worked.
- Contract Type: Whether you had a limited or unlimited contract.
- Reason for Leaving: Whether you resigned or were terminated.
Benefits of Using a Gratuity Calculator MOHRE:
- Saves time.
- Ensures accuracy.
- Helps you understand your legal entitlement.
Understanding Basic Salary Calculation in UAE
Gratuity is calculated on your basic salary, not your full salary. This excludes allowances like housing, transport, or other benefits.
Example:
If your total salary is AED 10,000, but your basic salary is AED 6,000, gratuity is calculated based on AED 6,000 only.
For accurate results, consider using a basic salary calculator UAE to determine your actual gratuity.
Types of Employment Contracts in the UAE
There are two main types of contracts under UAE Labour Law:
1. Limited Contract
A limited contract has a fixed duration. If you don’t complete the agreed period, you may lose your gratuity entitlement.
2. Unlimited Contract
An unlimited contract allows flexibility, as you can resign with proper notice. However, gratuity calculations vary based on your resignation or termination.
Gratuity Calculation Formulas
Gratuity calculation differs for limited and unlimited contracts. Let’s break it down.
For Limited Contracts:
Service Years: 1 to 5 Years
Gratuity=(Basic Salary×21 days×Service Years)/30\text{Gratuity} = \left( \text{Basic Salary} \times 21 \, \text{days} \times \text{Service Years} \right) / 30Gratuity=(Basic Salary×21days×Service Years)/30
Service Years: More Than 5 Years
Gratuity=(Basic Salary×30 days×Service Years)/30\text{Gratuity} = \left( \text{Basic Salary} \times 30 \, \text{days} \times \text{Service Years} \right) / 30Gratuity=(Basic Salary×30days×Service Years)/30
For Unlimited Contracts:
Resignation:
- Less than 1 year: No gratuity.
- 1-3 years: 1/3 of 21 days' basic salary for each year.
- 3-5 years: 2/3 of 21 days' basic salary for each year.
- More than 5 years: 21 days’ basic salary for the first 5 years + 30 days for additional years.
Termination:
- Less than 1 year: No gratuity.
- 1-5 years: 21 days’ basic salary for each year.
- More than 5 years: 21 days’ basic salary for the first 5 years + 30 days for additional years.
Gratuity Formula Table
| Contract Type | Years of Service | Gratuity Formula | Eligibility |
|---|---|---|---|
| Limited Contract | 1 to 5 years | (Basic Salary × 21 days × Service Years) ÷ 30 | Minimum 1 year of service. |
| Limited Contract | More than 5 years | (Basic Salary × 30 days × Service Years) ÷ 30 | Continuous service required. |
| Unlimited Contract | 1-3 years | 1/3 × (Basic Salary × 21 days × Service Years) ÷ 30 | Applies only after 1 year. |
| Unlimited Contract | 3-5 years | 2/3 × (Basic Salary × 21 days × Service Years) ÷ 30 | Eligible if resigned or terminated properly. |
| Unlimited Contract | More than 5 years | (Basic Salary × 30 days × Service Years) ÷ 30 | Full gratuity entitlement. |
How to Apply for Gratuity After Resignation
If you’re resigning and wondering how to proceed, follow these steps:
1. Review Your Employment Contract
Ensure your contract doesn’t have clauses that could affect your gratuity.
2. Complete the Notice Period
Serve your notice period as per the contract terms.
3. Calculate Your Gratuity
Use an online gratuity calculator UAE to estimate your payment.
4. Submit a Formal Request
Write a polite email or letter to your HR department. Example:
Subject: Gratuity Request
Dear [HR Manager’s Name],
I would like to request the calculation and release of my gratuity payment as per UAE Labour Law. I have completed [X years] of service with the company. Kindly guide me through the next steps.
Best regards,
[Your Name]
5. Follow Up Politely
If there’s no response, you can escalate the matter to the Ministry of Human Resources and Emiratisation (MOHRE).
Gratuity Denial Scenarios
Under UAE Labour Law, gratuity can be denied in specific cases, such as:
- Resigning without serving the notice period.
- Misconduct, like theft or violence.
- Leaving a limited contract before completing the agreed duration.
Final Settlement Calculation
Your final settlement includes gratuity, unused leave balance, and any pending salaries. Use a UAE salary calculator to check your final payout.
Gratuity for Domestic Helpers in UAE
Domestic helpers, such as housemaids, have a different gratuity formula under UAE Labour Law. They are entitled to:
- One month’s salary for every year of service after one year of employment.
- No gratuity if they serve less than one year.
Example Table for Domestic Helper Gratuity Calculation:
| Years Worked | Basic Salary | Gratuity Pay |
|---|---|---|
| 1 Year | AED 2,000 | AED 2,000 (1 month’s pay) |
| 3 Years | AED 2,000 | AED 6,000 (3 months’ pay) |
Gratuity vs Tip
Many confuse gratuity with tips. Here’s the difference:
| Gratuity | Tip |
|---|---|
| Legal payment under Labour Law. | Voluntary payment by customers. |
| Calculated based on salary and years of service. | Amount varies. |
| Paid by the employer. | Paid by customers. |
How to Politely Ask for Gratuity?
When requesting gratuity, professionalism is key. Here’s how you can do it:
- Use polite language in emails or letters.
- Clearly mention your service duration and request for gratuity calculation.
- Follow up respectfully if there’s no response.
FAQs on Gratuity Calculation in UAE
Who is Eligible for Gratuity in UAE?
Expatriates working in the private sector are eligible. UAE nationals receive pensions instead.
What is the Minimum Service Period?
At least 1 year of continuous service.
Can Employers Deny Gratuity?
Yes, in cases like misconduct or incomplete service.
What is the Maximum Gratuity?
Gratuity cannot exceed two years’ basic salary.
Final Thoughts
Gratuity is an essential right for employees in the UAE. Understanding how it’s calculated and staying informed about Labour Law can ensure you get your entitlement. Use tools like a gratuity calculator UAE to make the process stress-free. Always communicate with your employer politely and keep records of your service. If disputes arise, consult legal experts to protect your rights.