Last updated: May 2026
UAE gratuity calculation basics
UAE gratuity is commonly estimated from two main inputs: basic salary and length of service. It is not usually calculated from the full salary package. Housing, transport, commission, and other allowances may be excluded from a simple gratuity estimate. For many employees, the common estimate is 21 days of basic salary for each year of service during the first five years. After five years, additional years are commonly estimated at 30 days of basic salary per year.
Example calculation
If your basic salary is AED 6,000, your estimated daily basic wage is AED 200. For 3 years of service, a rough estimate is 21 × 200 × 3 = AED 12,600.
Common estimate rules
- Less than 1 year of service: commonly estimated as no gratuity.
- 1 to 5 years: commonly 21 days of basic salary per completed year.
- More than 5 years: commonly 21 days per year for the first 5 years, then 30 days per extra year.
- Total gratuity is generally capped and special cases may change the result.
FAQ
Is UAE gratuity based on basic salary?
Yes, gratuity is generally estimated using basic salary, not total salary package.
Do allowances count in gratuity?
Allowances are usually not included in a simple gratuity estimate, but individual contracts and disputes can vary.
Can this calculator replace legal advice?
No. It gives an estimate only. For disputes or unusual cases, check official guidance or speak to a qualified professional.