Online Gratuity Calculator for Accountants and Payroll Teams

An employee with at least one year of continuous service earns 21 days of basic wage for each of the first five years and 30 days for each year after that, under Article 51 of Federal Decree-Law No. 33 of 2021. The daily wage is the last basic monthly salary divided by 30, a part year counts in proportion, and the total cannot exceed two years’ wage. On a basic salary of AED 8,000 and four years’ service that is 84 days at AED 266.67, or AED 22,400.

Basic salary only. Housing, transport, utilities and furniture allowances are excluded, and so are overtime, commission and bonuses. The figure used is the basic wage on the last payslip, not an average across the years, so a pay rise late in someone’s employment reprices every year they have already served.

Yes. The old law, Federal Law No. 8 of 1980, cut gratuity to a third for a resignation after one to three years on an unlimited contract and to two thirds after three to five years. Federal Decree-Law No. 33 of 2021 removed both reductions from 2 February 2022 and moved every employee onto a fixed-term contract. A calculator that still asks for “limited or unlimited” and applies fractions is using rules that no longer apply.

One year of continuous service. An employee who leaves inside the first year is owed no gratuity, whoever ends the contract. Probation counts towards that year once the employee is confirmed and stays. Part-time employees are paid in proportion to the hours in their contract, under Article 30 of Cabinet Resolution No. 1 of 2022. UAE nationals are covered by the pension and social security law instead.

Yes: two years’ wage, which this calculator takes as 24 months of basic salary. Because the first five years earn 105 days and each later year 30, the cap is reached at about 25 and a half years of service. Beyond that, further years add nothing.

No. Article 51 states that days of absence from work without pay are not included in the period of service, so they are subtracted before the calculation. Paid leave counts in full: annual leave, public holidays and sick leave on full or half pay are all service.

Within 14 days of the end of the contract, together with the final salary, unused leave and any other end-of-service dues. If an employee dies in service, the dues are paid to the family. A late payment can be reported to the Ministry of Human Resources and Emiratisation.

It cannot be forfeited, even when an employee is dismissed without notice under Article 44 — that power disappeared with the old law. The employer may deduct amounts the employee owes it, such as an unpaid salary advance or loan. A disputed deduction is a matter for the Ministry of Human Resources and Emiratisation and, failing settlement there, the labour courts.

Accrue it monthly: debit staff costs and credit the provision for employees’ end-of-service benefits, a non-current liability. The monthly charge is 5.83% of basic salary during the first five years (21 ÷ 30 ÷ 12) and 8.33% after. At each year end, true the provision up to what would be payable if every employee left on that date, and recompute it whenever a basic salary changes. Smaller companies reporting under IFRS for SMEs commonly measure it this way; companies under full IFRS apply the projected unit credit method in IAS 19, usually with an actuarial valuation.

It applies on the mainland and in free zones that follow the federal labour law, such as DMCC, JAFZA, IFZA and RAKEZ. The DIFC replaced gratuity in 2020 with monthly employer contributions to the DEWS savings plan: 5.83% of basic salary in the first five years and 8.33% after. ADGM applies its own Employment Regulations, which use a similar 21-and-30-day formula but differ in detail. Employers who have joined the voluntary savings scheme under Cabinet Resolution No. 96 of 2023 pay monthly contributions into an approved fund instead of a lump sum at exit.