How to Calculate UAE Gratuity (Worked Example)
A step-by-step method for working out your UAE end-of-service gratuity by hand — plus a ready-reckoner table you can check your own numbers against.
→ Skip the maths — use the Gratuity Calculator
You can estimate your UAE gratuity in four steps using nothing more than your basic salary and your length of service. Here is the exact method, followed by a worked example and a lookup table.
Step 1 — Find your daily wage
Gratuity is paid on basic salary only, so ignore housing, transport and other allowances. Divide your basic monthly salary by 30 to get the daily wage:
Daily wage = Basic monthly salary ÷ 30
Step 2 — Count your years of service
Count complete years plus any part-year as a fraction. You must have at least one full year to qualify. Probation time counts if employment continued.
Step 3 — Apply the 21/30-day bands
The first five years accrue 21 days of basic pay per year; every year beyond five accrues 30 days per year. Add up the days, then multiply by your daily wage.
Gratuity days = (first 5 yrs × 21) + (extra yrs × 30)
Gratuity = Gratuity days × Daily wage
Step 4 — Apply the two-year cap
If the result is larger than two years' total wages, it is capped there. For most people this step changes nothing.
Worked example
Take a basic salary of AED 6,000 and 7 years of service.
| Step | Calculation | Result |
|---|---|---|
| Daily wage | 6,000 ÷ 30 | AED 200 |
| First 5 years | 5 × 21 days | 105 days |
| Years 6–7 | 2 × 30 days | 60 days |
| Total days | 105 + 60 | 165 days |
| Gratuity | 165 × 200 | AED 33,000 |
Ready-reckoner (basic salary AED 6,000)
These figures assume a flat AED 6,000 basic throughout. Scale proportionally for other salaries — at AED 12,000 basic, simply double every number.
| Years of service | Gratuity days | Gratuity (AED) |
|---|---|---|
| 1 | 21 | 4,200 |
| 2 | 42 | 8,400 |
| 3 | 63 | 12,600 |
| 4 | 84 | 16,800 |
| 5 | 105 | 21,000 |
| 7 | 165 | 33,000 |
| 10 | 255 | 51,000 |
| 15 | 405 | 81,000 |
| 20 | 555 | 111,000 |
Remember the two-year cap: at AED 6,000 basic, two years of "total wages" depends on your full salary including allowances, so the cap usually only matters well beyond 20 years. If you also have unused annual leave, add its encashment separately — see our leave encashment guide — and combine everything in the final settlement calculator.
A second scenario: crossing the five-year line
The step from year five to year six is where people most often miscalculate, because the rate jumps from 21 to 30 days. Consider a basic salary of AED 9,000 at exactly 6 years. Daily wage = 9,000 ÷ 30 = AED 300. The first five years earn 5 × 21 = 105 days; the sixth year earns 30 days; total 135 days × 300 = AED 40,500. Note that only the years beyond five get the higher rate — the first five are always at 21 days, no matter how long you ultimately stay.
If you leave part-way through a year, that final period is pro-rated. For instance, 6 years and 6 months at AED 9,000 basic adds half of a 30-day year (15 days × 300 = AED 4,500) on top of the AED 40,500, giving AED 45,000. The calculator handles the fraction automatically when you enter months alongside years.
Key takeaways
- Daily wage = basic monthly salary ÷ 30.
- First 5 years accrue 21 days each; every later year accrues 30 days.
- Multiply total days by the daily wage, then apply the two-year cap.
- Only the years beyond five earn the higher 30-day rate.
- Part-years are paid pro-rata once you pass the one-year qualifying mark.
Frequently asked questions
What divisor is used for the UAE daily wage?
Your basic monthly salary is divided by 30 to get the daily wage used in the gratuity formula.
How many days of gratuity do I get per year?
21 days of basic salary for each of the first five years, and 30 days for each year beyond five.
Does gratuity include my allowances?
No. Only basic salary is used. Housing, transport and other allowances are excluded.
How is a partial year treated?
Part-years are paid pro-rata using the same daily-wage formula, once you have passed the one-year qualifying threshold.
Related calculators & guides
More UAE employment calculators
Calcnate keeps a full set of law-accurate UAE tools so you can check every part of an exit or contract in one place. Each is built on Federal Decree-Law 33/2021 and the same figures explained above:
- UAE Gratuity Calculator — your end-of-service lump sum on the 21/30-day bands.
- UAE Final Settlement Calculator — gratuity, leave, notice and pending pay combined.
- UAE Notice Period Calculator — notice length and pay in lieu.
- UAE Leave Encashment Calculator — cash value of unused annual leave.
- UAE Probation Period Calculator — the six-month rules and notice.
- UAE Maternity Leave Calculator — the 45+15 day pay split.
- UAE Unemployment Insurance (ILOE) Calculator — your involuntary-loss payout.
Browse everything on the UAE hub.