UAE Gratuity Calculator and Demand Letter Generator

Gratuity is the lump-sum end-of-service payment UAE law requires your employer to pay once you've completed a year or more of continuous service — and most employees only work it out properly once they're about to leave a job. Use the UAE gratuity calculator below to get an instant, exact AED figure under Article 51 of Federal Decree-Law No. 33 of 2021, then generate a formal demand letter further down this page if your employer hasn't paid. Updated for 2026.

✓ Instant AED calculation✓ Article 51 FDL 33/2021✓ Free calculator✓ Demand letter generator included

UAE Gratuity Calculator

Free & instant · Article 51 formula · Full breakdown of days, daily wage, and the 2-year cap

Resigned or terminated, it doesn't change this calculation — under current UAE labour law both use the same formula, provided you completed at least one year and weren't dismissed for gross misconduct.

Enter your salary and employment dates to see your gratuity estimate.

What Is Gratuity Under UAE Labour Law?

End-of-service gratuity is a mandatory lump-sum payment that UAE private-sector employers owe employees once employment ends, provided the employee has completed at least one year of continuous service. It functions as the UAE's substitute for a pension for expatriate workers, who are not part of any UAE national pension scheme.

Gratuity applies the same way whether you resign or are terminated, and whether your contract was limited or unlimited — all private-sector contracts are now fixed-term under Article 8 of Federal Decree-Law No. 33 of 2021. The only situation where gratuity can be forfeited entirely is dismissal for proven gross misconduct under Article 44, decided by a court — not simply asserted by an employer at exit.

Some employers have started enrolling staff in the optional Savings Scheme, an investment-fund alternative to lump-sum gratuity introduced under Cabinet Resolution No. 96 of 2023. If you are enrolled in this scheme, your end-of-service benefit works differently from the calculation on this page — check your payslip or HR for confirmation.

Article 51 Gratuity Formula Explained

1. Daily wage formula

Your daily wage for gratuity purposes is your basic monthly salary divided by 30 — not the actual number of days in that calendar month. This daily rate is what gets multiplied by the number of gratuity days you've earned.

Daily wage = Basic monthly salary ÷ 30

2. Years-of-service formula

Gratuity days accrue at two different rates depending on how long you've worked:

  • 21 days' basic wage for each year of the first 5 years of service
  • 30 days' basic wage for each year beyond 5 years of service

3. Calculation methodology

Putting both formulas together, the full calculation runs in four steps:

  1. Work out your exact service period in days (excluding unpaid leave).
  2. Split that period into "first 5 years" and "years beyond 5," pro-rating any partial year.
  3. Convert each portion into gratuity days (×21 or ×30) and multiply by your daily wage.
  4. Add both portions together, then cap the result at 24 months' basic salary if it's higher.

Example: 5 Years of Service

An employee with a basic monthly salary of AED 10,000 completes exactly 5 years of service.

Daily wage = AED 10,000 ÷ 30 = AED 333.33

Gratuity days = 5 years × 21 days = 105 days

Gratuity = 105 × AED 333.33 = AED 35,000.00

No years fall beyond the first bracket, so the entire calculation uses the 21-day rate. The 24-month cap (AED 240,000) is nowhere near reached.

Example: 10 Years of Service

Same employee, same AED 10,000 basic salary, now with 10 years of service.

First 5 years: 5 × 21 = 105 days

Next 5 years: 5 × 30 = 150 days

Total gratuity days = 105 + 150 = 255 days

Gratuity = 255 × AED 333.33 = AED 85,000.00

Notice the jump: years 6–10 are worth nearly 43% more per year than years 1–5, because they're paid at the 30-day rate instead of 21.

Example: 15 Years of Service

Same AED 10,000 basic salary, now with 15 years of service.

First 5 years: 5 × 21 = 105 days

Next 10 years: 10 × 30 = 300 days

Total gratuity days = 105 + 300 = 405 days

Gratuity = 405 × AED 333.33 = AED 135,000.00

Still under the 24-month cap of AED 240,000. At this basic salary, an employee would need roughly 35+ years of service before the cap came into play.

Common Gratuity Calculation Mistakes

Most gratuity disputes don't happen because an employee isn't entitled — they happen because one side made one of these errors:

Using gross salary instead of basic salary

The single most common error. Gratuity is calculated only on basic salary — housing, transport, and other allowances are excluded, even though they may make up 40–60% of a typical UAE pay package.

Forgetting the 24-month cap

Long-tenured employees sometimes calculate a figure well above 24 months' basic salary without realising the law caps total gratuity at that amount, regardless of years served.

Including unpaid leave in the service period

Days of unpaid leave or absence without pay are excluded from the service period used to calculate gratuity. Including them inflates the years-of-service figure and overstates the result.

Applying the old resignation penalty

Many people still assume resigning before five years cuts their gratuity to one-third or two-thirds. That rule applied only to unlimited contracts under the old law and was removed for service accrued under Federal Decree-Law No. 33 of 2021.

Mixing up the 21-day and 30-day brackets

Every year of service beyond year five is paid at 30 days, not 21. Applying 21 days across the entire tenure understates the gratuity for anyone with more than five years of service.

Using calendar years instead of exact service days

Rounding "4 years and 9 months" down to 4 years, or up to 5, changes the result. Partial years should be pro-rated using exact days, not rounded to the nearest whole year.

Generate a UAE Gratuity Demand Letter

If your calculation above shows an amount you haven't received, generate a formal demand letter citing Article 51 and Article 53 of FDL 33/2021 — AED 49.

Employment details

Your employment dates and the reason your employment ended.

Most UAE employment after 2022 is unlimited term under FDL 33/2021.

What To Do If Your Employer Does Not Pay

Under Article 53, your employer must settle your gratuity and all other end-of-service entitlements within 14 days of your last working day. If that deadline passes:

  1. Send a written demand letter with a clear, short deadline (7–14 days) and your exact calculated amount.
  2. Keep records — your contract, payslips, bank statements, and any messages about the delay.
  3. If the deadline passes without payment, file a free MOHRE complaint.
  4. Avoid signing any "full and final settlement" letter that excludes or reduces your gratuity, under pressure or otherwise — such waivers are generally unenforceable.

⏱ Mind the one-year limitation period

Article 6 of the Labour Law gives you one year from your last working day to bring most labour claims, including gratuity. Cases filed after this window are routinely dismissed on limitation grounds alone — act once your 14-day deadline has passed, not months later.

MOHRE Complaint Process

If a demand letter doesn't resolve the issue, a MOHRE complaint is the next step — free, no lawyer required, and the gateway to both a binding decision and labour court referral.

1

Send a written demand letter

Give your employer a clear, dated request with a 7–14 day payment deadline, citing Article 51 (entitlement) and Article 53 (14-day payment deadline).

2

File a free MOHRE complaint

Use the MOHRE app, mohre.gov.ae, or the call centre on 600 590000. Log in with UAE Pass and select the Labour Complaints category for unpaid gratuity or end-of-service benefits.

3

Tawafuq mediation

A MOHRE case officer contacts both sides and works toward a settlement, typically within a 14 working-day negotiation period.

4

Binding decision or court referral

For claims up to AED 50,000, MOHRE can issue a final, enforceable decision directly under Federal Decree-Law No. 9 of 2024. Larger or unresolved claims are referred to the labour court.

5

Court registration, if referred

Register your case with the labour court within the deadline on your MOHRE referral letter — commonly 14 days — to avoid losing your position on a technicality.

For the full filing walkthrough, including the Tawafuq mediation process and the AED 50,000 direct decision rule, see our MOHRE Complaint Letter Generator guide.

About This Guide

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Updated 2026

Reflects Federal Decree-Law No. 33 of 2021, the removal of the resignation reduction rule, and the Savings Scheme alternative introduced under Cabinet Resolution No. 96 of 2023.

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Methodology shown

Every figure on this page is built from the same formula the calculator uses — daily wage, bracketed days, and the 24-month cap — so you can verify it by hand.

⚠️

Not legal advice

This guide and calculator provide general information and estimates for non-lawyers. For disputed calculations or complex cases, consult a UAE-licensed employment lawyer.

External references: MOHRE — mohre.gov.ae · The Official Portal of the UAE Government — u.ae · UAE Legislation — Federal Decree-Law No. 33 of 2021

Frequently Asked Questions

How is gratuity calculated in the UAE?▾
Under Article 51 of Federal Decree-Law No. 33 of 2021, gratuity is 21 days' basic salary for each of the first five years of service, and 30 days' basic salary for each year beyond five. The total is capped at 24 months' basic salary. The calculation uses your last basic monthly salary divided by 30 to get a daily wage, then multiplies that daily wage by the total days owed.
Does resigning reduce my gratuity in the UAE?▾
No, not under current law. Federal Decree-Law No. 33 of 2021 removed the old reduction that applied to employees who resigned from unlimited contracts before completing five years. Today, resignation and termination use the same Article 51 formula, as long as you completed at least one year of continuous service and were not dismissed for proven gross misconduct under Article 44.
Is gratuity calculated on basic salary or total salary?▾
Gratuity is calculated on basic salary only, as stated in your MOHRE-registered employment contract. Housing allowance, transport allowance, other allowances, commissions, bonuses, and overtime pay are all excluded from the calculation, even if they make up a large share of your total monthly pay.
What is the maximum gratuity I can receive in the UAE?▾
The maximum gratuity payable under Article 51 is capped at 24 months' (2 years') basic salary, no matter how many years you have worked. Most employees with moderate basic salaries and reasonable service lengths never reach this cap, but it becomes relevant for long-tenured employees with high basic salaries.
What if my employer refuses to pay my gratuity?▾
First send a written demand letter citing Article 51 and Article 53 of Federal Decree-Law No. 33 of 2021, with a clear payment deadline. If your employer still does not pay, file a free complaint with MOHRE through the app, website, or call centre. MOHRE will attempt mediation, and can issue a directly enforceable decision for claims up to AED 50,000, or refer larger claims to the labour court.

Calculate Your Gratuity and Take Action

Get your exact AED entitlement free, then generate a formal demand letter citing Article 51 and Article 53 of FDL 33/2021 if your employer hasn't paid. AED 49 for the letter.

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