UAE gratuity calculator
Calculate end-of-service gratuity under Federal Decree-Law 33 of 2021 from basic salary and length of service: 21 days a year for the first five years, 30 days after, capped at two years' salary, with the monthly accrual to book.
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Sources
The formula, in one line
Article 51 of Federal Decree-Law 33 of 2021 gives 21 days of basic salary for each of the first five years of service and 30 days for each year after that, with partial years pro-rated, nothing under one year of continuous service, and the total capped at two years of basic salary.
The daily rate is the basic monthly salary divided by 30 by convention, which is what most employers and the ministry's own calculators use; it is editable above in case your contract states otherwise.
What to book each month
Gratuity is a liability that accrues while the employee works. Book the monthly share of the annual entitlement, 21 or 30 days of the current daily rate divided by twelve, to gratuity expense and to the provision, and remeasure the balance whenever basic salary changes.
Skyline Nexus ERP posts the accrual from the HR record each payroll run and releases the provision when the final settlement is paid, so the balance sheet shows the real liability at every month end.
Common questions
Is gratuity calculated on basic salary or total salary?
On basic salary only. Allowances are not part of the base, which is why the split between basic and allowances in the contract matters.
What happens to partial years?
They count in proportion once the first full year is complete. Three years and six months earns 21 days × 3.5.
Does resignation reduce the gratuity?
The current law as summarised in the fact sheet we work from applies one formula; the old unlimited-contract reductions for resignation are not part of it. Confirm any unusual case with the Ministry of Human Resources and Emiratisation.
How is the cap applied?
The gratuity cannot exceed two years of basic salary, 24 months. On AED 10,000 basic that is AED 240,000 however long the service.
Does this calculator upload anything?
No. It runs in your browser. Only the optional form at the bottom sends anything, and only if you choose to email yourself the result.
Email me this result as a PDF
Leave your name and work email and we send you a printable copy of this result, with a note on how Skyline Nexus ERP books the same figure automatically each month.