The UAE gratuity calculator 2026 is designed for private‑sector workers and HR teams who want a clear estimate of end‑of‑service benefits before preparing a final settlement. EGSH applies the statutory formula under Article 51 of the UAE Labour Law and related MoHRE rules, so employees and employers can quickly see an indicative figure based on the basic wage and length of service.
This article explains how end‑of‑service gratuity works in the UAE in 2026, who is eligible, and how the 21‑day/30‑day rules are applied in practice. It then shows how to calculate the end‑of‑service gratuity UAE style step by step, how the EGSH online tool mirrors these calculations (including part‑time and Savings Scheme cases), and when you may need personalised support from EGSH or MoHRE.
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Understanding End‑of‑Service Gratuity in the UAE (Legal Basics)
End‑of‑service gratuity is a statutory payment due to many private‑sector workers when their employment ends, provided they have completed a minimum period of continuous service. For expatriate full‑time employees, the calculation is governed mainly by Article 51 of Federal Decree‑Law No. 33 of 2021 Regarding the Regulation of Employment Relationship (as amended). The UAE nationals follow a different system based on pension and social security legislation, not the standard expatriate gratuity formula.
Under the current UAE Labour Law, a foreign full‑time private‑sector worker becomes entitled to gratuity after at least one year of continuous service with the same employer, unless they are covered by an approved alternative scheme. The law has been applied in this form since 2 February 2022 and continues to regulate UAE end-of-service benefits 2026 for employers under the jurisdiction of the Ministry of Human Resources and Emiratisation (MoHRE). Free zones with their own employment systems may have separate rules and are not covered here.
The law no longer distinguishes between “limited” and “unlimited” contracts for gratuity purposes; the same gratuity calculation applies to standard full‑time contracts regardless of previous categorisation. UAE national employees instead build up pensionable service with the General Pension and Social Security Authority or the relevant emirate‑level fund, and their end‑of‑service position is determined by that regime, not by the 21/30‑day gratuity rules.
Under Federal Decree-Law No. 33 of 2021, eligibility for statutory end-of-service gratuity generally requires at least one year of continuous service, regardless of the employment type. Where this threshold is met, part-time and job-sharing employees may be entitled to gratuity on a proportional basis, provided their employment contract specifies a defined and approved work pattern in accordance with MoHRE requirements. Employees who leave before completing one full year of service are not entitled to statutory gratuity, unless their contract or applicable regulations provide more favourable terms.
Different rules may apply in certain free zones or where the employer has opted into the voluntary Alternative End-of-Service Benefits (Savings) Scheme. In such cases, the traditional gratuity regime applies only up to the date of enrolment in the scheme, after which end-of-service benefits are governed by the scheme’s terms rather than the standard gratuity provisions.
Legal Foundation and Scope of Application
The core rules for expatriate gratuity are set out in Federal Decree‑Law No. 33 of 2021, especially Article 51, supported by definitions of “wage” and “average daily wage” elsewhere in the law. These provisions apply to private‑sector establishments regulated by MoHRE across the UAE, including businesses in Dubai and Abu Dhabi mainland. They do not override special regimes in certain free zones where separate labour regulations and gratuity systems exist.
MoHRE’s official materials clarify that UAE national workers are excluded from the Article 51 gratuity formula because they are covered by federal and local pension and social security systems. The same official guidance confirms that the new law replaced the previous distinction between limited/unlimited contracts and that the entitlement threshold is now 1 year of continuous service for foreign full‑time workers, subject to any alternative Savings Scheme enrolment.
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How Gratuity Is Calculated Under UAE Labour Law
The statutory gratuity formula is mechanical, but it must be applied carefully to the basic wage, service period, fractions of years, and the statutory cap. Any credible UAE end-of-service gratuity calculator must reflect these elements exactly, because MoHRE and UAE courts rely on them when settling disputes.
Basic Wage and Service Period
Under the UAE Labour Law, gratuity is calculated on the basis of the worker’s last basic wage at the end of service, not on total remuneration. Basic wage (often called “basic salary” in contracts) excludes allowances such as housing, transport, overtime, bonuses and in‑kind benefits; only the fixed basic component used as the reference for other benefits is counted for Article 51 gratuity.
Continuous service is the period from the start date of employment with the same employer until the termination date, minus any unpaid days of absence from work. MoHRE rules specify that unpaid absence is excluded when calculating the length of service for gratuity, so long unpaid leave or unauthorised absence can reduce the effective years and months used in the calculation. The worker must still have at least one full year of adjusted continuous service to qualify for any gratuity under the traditional system.
The 21‑Day and 30‑Day Calculation Rules
In the UAE, there are two different accrual rates depending on years of service. For each of the first five years of continuous service, a full‑time foreign worker is entitled to an amount equal to 21 days of basic wage for every completed year. For each year after the fifth year, the entitlement increases to the equivalent of 30 days of basic wage for every additional completed year.
Gratuity is also due proportionately for parts of a year, once the one‑year threshold is passed. For example, if a worker has three years and six months of continuous service, the first three completed years would be calculated using 21 days of basic wage per year, and the additional six months would be treated as half a year at the same 21‑day rate. The same principle applies to service beyond five years, with fractions of a year being remunerated at the 30‑day rate.
Daily Wage, Cap, and Deductions
The law sets out a straightforward calculation method that underpins most end-of-service benefits calculators. For employees paid on a monthly basis, the basic daily wage is calculated by dividing the last basic monthly wage by 30. Gratuity for the first five years of service is calculated as: basic daily wage × 21 × number of completed years (up to five), plus any applicable pro-rata portion for an incomplete year. For service beyond five years, the calculation becomes: basic daily wage × 30 × number of completed years after year five, again plus any applicable pro-rata fraction. The total gratuity is the sum of these components.
Under Article 51 of the UAE Labour Law, the total end-of-service gratuity payable to an employee may not exceed the equivalent of two years’ basic wage. This statutory cap applies to gratuity calculated under the standard regime, regardless of the length of service.
Employers may deduct from the final gratuity any amounts lawfully due from the worker, such as confirmed debts or sums established under the Labour Law or an enforceable court judgment.
For workers paid weekly, daily, or on a piece-rate basis, the law applies an average daily wage method. This is typically calculated based on actual wages received and actual days worked over a defined reference period. That average daily wage then replaces the monthly-divided-by-30 figure in the gratuity formula. Any robust UAE end-of-service benefits calculator must therefore account for recent earnings and working days for non-monthly paid workers, in line with MoHRE practice.
A simple illustration of how the 21/30‑day rules work is shown below, assuming a constant basic monthly wage of AED 6,000 and no unpaid absence:
| Example Service Period | Basic Monthly Wage (AED) | Daily Wage (AED 6,000 ÷ 30) | Gratuity for First 5 Years | Gratuity After 5 Years | Total Before Cap | Two‑Year Wage Cap Applied? |
|---|---|---|---|---|---|---|
| 3 years | 6,000 | 200 | 3 × 21 × 200 = 12,600 | 0 | 12,600 | No |
| 7 years | 6,000 | 200 | 5 × 21 × 200 = 21,000 | 2 × 30 × 200 = 12,000 | 33,000 | No |
| 10 years | 6,000 | 200 | 5 × 21 × 200 = 21,000 | 5 × 30 × 200 = 30,000 | 51,000 | No (2‑year cap = 144,000) |
In the ten‑year example, the uncapped gratuity (AED 51,000) is still below the maximum of two years’ basic wage (24 × 6,000 = AED 144,000), so no adjustment is required. The cap becomes relevant primarily where workers have very long service and high basic wages.
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Using the UAE Gratuity Calculator 2026 (Step by Step)
The UAE end-of-service gratuity calculator takes the rules explained above and converts them into a set of clear input fields. The output is an indicative estimate only; the binding amount of end‑of‑service gratuity UAE‑wide is always determined by the employer’s final settlement and, in case of dispute, by MoHRE or the courts.
Information You Need Before You Start
To obtain a reliable estimate, you should collect a few key data points before using the calculator:
- Your last basic monthly wage (as per your contract or latest payslip), excluding allowances and bonuses.
- Your total period of continuous service with your current employer, expressed in years and months, after excluding any unpaid days of absence.
- Your work pattern (full‑time, part‑time, job‑sharing, or piece‑rate).
- Whether your employer has enrolled you in the Alternative End‑of‑Service Benefits Scheme (Savings Scheme), and if so, the date of enrolment and your latest fund balance statement, if you have it.
Unpaid leave that is not counted as working time under your contract, and any days of unauthorised absence, should be removed from the service period you enter. This ensures that the calculator mirrors the definition of continuous service used in MoHRE rules.
Entering Your Data and Understanding the Result
In the calculator interface, you enter your basic monthly wage in AED, then specify the total years and additional months of service with your current employer. The calculator converts months into fractions of a year and applies the 21-day basic wage for the first five years and the 30-day basic wage thereafter, using the statutory daily wage formula. For part‑time or job‑sharing work, you will also be asked to input your usual weekly or monthly working hours so the calculator can derive the proportional entitlement.
If you indicate that you are enrolled in the Savings Scheme, the calculator will ask for your enrolment date. It will then calculate traditional gratuity only for the service period before that date, under Article 51, and separate this from any post‑enrolment Savings Scheme amount (which is based on contributions and returns recorded in your fund statement). The tool automatically checks the two-year wage cap and will not show an estimated gratuity above that ceiling.
For example, assume a full‑time expatriate worker in Dubai with a basic monthly wage of AED 8,000 and 4 years and 6 months of continuous paid service, not enrolled in the Savings Scheme. The calculator will derive a daily wage of AED 8,000 ÷ 30 = AED 266.67. It then multiplies this by 21 days and 4.5 years (4 full years plus 0.5 of a year), giving 266.67 × 21 × 4.5 ≈ AED 25,200 as the estimated gratuity. EGSH presents this figure clearly, with a breakdown of the years and the fact that the traditional system applies throughout.
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MoHRE and Tasheel confirm that non‑full‑time workers in the private sector can also be entitled to gratuity, but the calculation is adjusted to reflect their reduced working hours or different pay structures. Any serious UAE gratuity calculation 2026 must therefore incorporate proportionality rules and eligibility limits for these categories.
Part‑Time and Job‑Sharing Workers
For part‑time and job‑sharing arrangements, end‑of‑service benefits are calculated in proportion to working hours compared with an equivalent full‑time role. The official formula is:
(Number of working hours in the worker’s contract per year ÷ number of working hours in a comparable full‑time contract per year) × 100 = percentage;
Percentage × value of gratuity for an equivalent full‑time worker = the worker’s gratuity.
In practice, the EGSH calculator first determines what the full‑time gratuity would be for the same basic wage and length of service, using the Article 51 rules. It then asks for your contracted weekly hours and compares them to a standard full‑time schedule (for example, 48 hours per week) to obtain a percentage. That percentage is applied automatically to the full‑time gratuity to generate your proportional end‑of‑service entitlement.
Piece‑Rate and Non‑Monthly Pay
Workers paid by the piece, or whose earnings vary significantly from period to period, cannot use a single fixed monthly basic wage figure. The Labour Law, therefore, relies on the “average daily wage” concept, derived from the worker’s actual wages and working days over a defined period. In the UAE end-of-service benefits calculator, piece‑rate workers are asked to enter their total basic earnings over the last several months and the number of days actually worked.
The calculator then derives an approximate average daily wage by dividing total earnings by total working days and uses that figure in place of the standard monthly‑divided‑by‑30 daily wage. The rest of the gratuity computation follows the same 21/30‑day rules and the two‑year cap, ensuring that piece‑rate workers’ end‑of‑service benefits are still aligned with Article 51.
Temporary Workers and Minimum Service
Temporary workers who are engaged for a specific, short‑term task and who do not complete at least one year of continuous service with the same employer are generally not entitled to statutory gratuity under UAE labour law. Tasheel’s guidance confirms that the one‑year threshold applies to entitlement for temporary workers as well, unless their contract or a collective agreement grants additional benefits.
In the EGSH calculator, any user who enters a service period of less than 12 months under the traditional system is flagged as not yet eligible for gratuity, with a note that service of one year or more is required by MoHRE rules. This helps HR officers and workers avoid misunderstandings about rights where the employment relationship has been of short duration.
The Alternative End‑of‑Service Benefits Scheme (Savings Scheme) and the Calculator
Cabinet Resolution No. 96 of 2023 introduced a voluntary Alternative End‑of‑Service Benefits Scheme, sometimes described as a Savings Scheme, for private‑sector workers. The scheme is implemented by MoHRE in coordination with the Securities and Commodities Authority and approved investment funds. As of 2026, participation is voluntary for employers and selected employees; traditional gratuity rules remain in force for those not enrolled.
How the Savings Scheme Changes Gratuity Accrual
When an employer subscribes to the Savings Scheme and enrols a worker, the traditional gratuity system does not disappear entirely; rather, it becomes fixed as of the enrolment date. Gratuity for the period before enrolment is calculated using the standard 21-day basic wage for the first five years, and the 30-day formula thereafter, and the accrued amount is preserved for payment at the end of employment.
From the enrolment date onwards, the employer no longer accrues additional traditional gratuity for that worker. Instead, the employer makes monthly contributions to an approved investment fund based on the worker’s basic monthly salary at each contribution date, in accordance with the percentages and rules set by the Scheme. At termination, the worker is entitled to receive both the preserved pre‑enrolment gratuity and the accumulated fund balance, which consists of employer contributions plus any investment returns, all subject to the detailed Scheme rules.
Skilled workers may be able to choose between different investment portfolios with varying risk and return profiles, whereas unskilled workers are generally placed in a capital‑guaranteed portfolio. The Scheme also allows workers to make additional voluntary contributions, typically up to around 25% of their annual salary, to build extra savings beyond the employer’s required contributions.
How the Calculator Reflects the Savings Scheme
The UAE gratuity calculator savings scheme function begins by asking whether the worker has ever been enrolled in the Alternative End‑of‑Service Benefits Scheme. If the answer is yes, the user must enter the date of enrolment and the total service period with the employer. The calculator then splits the service into two segments: pre‑Scheme and post‑Scheme.
For the pre‑enrolment segment, the calculator applies Article 51 exactly as for any other worker, using the basic wage at the end of service (or at the enrolment date where appropriate) and the 21/30‑day rules to produce a frozen gratuity figure. For the post‑enrolment period, the calculator does not attempt to project investment performance or exact fund balances. Instead, it allows the user to input their current or expected fund balance, taken from official statements, and then displays an indicative combined total of: (1) pre‑Scheme gratuity estimate and (2) the user‑entered Savings Scheme balance.
The calculator clearly states that investment returns, portfolio selection (including the default capital‑guaranteed portfolio for certain worker categories), and voluntary contributions are determined by the Scheme and the chosen investment fund, not by EGSH or MoHRE’s gratuity rules. Users are therefore directed to their fund operator’s statements and official Scheme documents for the precise post‑enrolment entitlement.
FAQ
Who Is Entitled to End‑of‑Service Gratuity in the UAE Private Sector?
Under Federal Decree‑Law No. 33 of 2021, a foreign full‑time worker in the private sector who has completed at least one year of continuous service with the same employer is generally entitled to end‑of‑service gratuity when the employment relationship ends, unless they are covered by an approved alternative scheme. UAE nationals are instead covered by pension and social security laws, and temporary workers with less than one year of service are not entitled to gratuity under the standard rules.
Is Gratuity Calculated on Basic Salary or Total Salary?
End‑of‑service gratuity in the UAE is calculated only on the worker’s last basic wage as defined in the Labour Law, not on the total salary including allowances. This means that housing allowances, transport allowances, overtime, bonuses, and other variable payments are excluded; the calculation uses only the fixed basic wage stated in the contract or payslip, which forms the basis for other benefits.
How Are Partial Years and Unpaid Leave Treated in Gratuity Calculations?
Once the worker has completed at least 1 year of continuous service, gratuity is calculated proportionately for partial years, applying the same 21‑day or 30‑day per year rate to the relevant fraction of the year. Unpaid days of absence are excluded from the service period used in the calculation, so long unpaid leave or unauthorised absence reduces the effective years and months of service that earn gratuity under Article 51.
What Is the Maximum Gratuity a Worker Can Receive Under UAE Law?
For expatriate workers, the total end‑of‑service gratuity payable under Article 51 is capped at the equivalent of two years’ wage. In practice, this means the final gratuity amount calculated using the 21/30‑day rules cannot exceed 24 months of the worker’s basic wage at the end of service, regardless of how long they have worked for the employer.
How Does Being Enrolled in the Savings Scheme Affect My End‑of‑Service Pay?
When a worker is enrolled in the voluntary Alternative End‑of‑Service Benefits Scheme, their traditional gratuity is calculated only for the period before enrolment, using the usual 21-day basic wage for the first five years and 30-day basic wage thereafter, and that amount is then frozen. For service after enrolment, the worker’s entitlement comes from the employer’s monthly contributions to the approved fund plus any investment returns, so at the end of employment, they receive both the preserved pre‑enrolment gratuity and their accumulated Savings Scheme balance.
Explained by
Amira Ali Al Hammadi
Labour & Tasheel Services Consultant at EGSH
Amira Ali Al Hammadi is a specialised service provider with nine years of experience delivering MOHRE-related Labour and Tasheel services. Her professional expertise covers establishment and employee procedures, including renewals, cancellations, amendments, fine payments, employment contracts, and compliance support for companies of all sizes.
This article is intended to provide general information based on official UAE sources, and does not constitute personalised legal advice. Before acting, applicants should verify the current rules and fees directly with the relevant authority or an authorised service centre.
