UAE Gratuity Calculation: How End-of-Service Benefits Work
End-of-service gratuity is a legal right for UAE employees after one year. Here's exactly how it's calculated, with the 21-day and 30-day rules explained.
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What gratuity is
End-of-service gratuity (EOSB) is a lump sum UAE employers must pay employees who complete at least one year of continuous service. It's calculated on the basic salary only — not total pay. The free UAE Gratuity Calculator estimates it instantly.
The calculation
First, find the daily wage: basic monthly salary × 12 ÷ 365. Then apply the service rules:
- First 5 years — 21 days of basic pay for each year.
- Beyond 5 years — 30 days of basic pay for each additional year.
- Under 1 year — no gratuity is due.
The total is capped at two years' wages.
A worked example
On a basic salary of AED 9,000 over 6.5 years, the daily wage is about AED 296. You earn 21 days × 5 years plus 30 days × 1.5 years = 150 days, giving roughly AED 44,400.
Basic vs total salary
Because gratuity uses basic pay, the basic-to-allowance split in a contract directly affects the payout. Use the UAE Salary Calculator to see the breakdown and employer cost.
Use the free UAE Gratuity Calculator | UAE Salary Calculator