Use it below, then read on for how the number is built and the one rule most online calculators still get wrong.
Basic pay only. Housing, transport and other allowances are not counted.
Advanced: unpaid leave
Enter your details above.
Capped at 2 years' salary (the legal maximum).
Your gratuity compounded at the return above, then discounted back to today's money at the inflation rate.
How the UAE gratuity actually works#
Under Federal Decree-Law No. 33 of 2021, any private-sector employee who completes at least one full year of continuous service is owed a gratuity when they leave. The rules are simple once you see them laid out:
- It is built on your basic salary only. Housing, transport, utilities and other allowances do not count toward it.
- Your daily wage is your basic monthly salary divided by 30.
- For the first 5 years, you earn 21 days of basic pay for each year of service.
- After five years, every additional year earns 30 days of basic pay.
- Fractions of a year count, once you are past the one-year mark.
- The total is capped at two years of pay.
That is the whole formula. The calculator above runs it for you, including the pro-rata months and the cap.
Resigning no longer cuts your gratuity#
This is the single most common myth, and it costs people real confidence when they are deciding whether to leave a job.
Under the old system, resigning was punished. Leave between one and three years of service and you forfeited two third of your gratuity. Leave between 3 and 5 years and you lost a 3rd. Only after 5 years did a resignation pay in full.
That system is gone. Since the 2021 law took effect, resignation and termination pay the same gratuity, as long as you have completed one full year. It no longer matters whether you quit or were let go.
Most gratuity calculators you find online still apply the old deductions, which quietly tells people they will lose money by resigning. This one does not. It reflects the current law, so the figure you see is the figure you are owed.
A worked example#
Take a basic salary of AED 15,000 and five years of service.
- Daily wage: 15,000 divided by 30 is AED 500.
- Five years at 21 days each is 105 days.
- 105 days times AED 500 is AED 52,500.
That is your gratuity, whether you resign or are let go. Now push the same salary to 10 years of service. The first 5 years still give you 105 days. The next 5 years give you 150 days at the higher 30-day rate. Together that is 255 days, or AED 127,500. The jump from 5 to 10 years more than doubles the payout, and that is by design.
The five-year mark is worth watching#
Because the accrual rate steps up from 21 to 30 days a year once you pass 5 years, the value of staying is not linear. If you are close to that line and weighing a move, the difference between 4 years and a bit and just over 5 years can be larger than it looks. Run both numbers in the calculator, one below 5 years and one just above, and compare before you decide.
What it is worth where you are going#
Your gratuity is paid in dirhams, but you may not spend your future in dirhams. The dirham is hard-pegged to the US dollar at 3.6725, so its dollar value is effectively fixed. Against a floating currency, it is not.
Say you plan to retire in the Philippines. An AED 100,000 gratuity converts to roughly 1.67 million pesos at today's rate. If the peso later weakens against the dollar, that same dirham payout buys even more pesos, and your money stretches further in the Philippines. If the peso strengthens, it buys fewer. Switch the currency selector in the calculator to see your figure in the currency you will actually spend, so the number means something in the place you are headed.
Do not spend it. Invest it.#
The most useful way to think about the gratuity is this: it is an involuntary financial-independence contribution your employer has been making on your behalf for years, and it is handed to you in one lump at the exact moment you lose your salary. Treat it as seed capital, as your pension, not a leaving bonus.
The calculator shows the projection. AED 52,500 invested at 7 percent for 20 years becomes roughly AED 203,000 on paper. That headline is not what it will buy. After 3 percent inflation it is worth about AED 112,000 in today's money, and the calculator shows both figures. That is the real choice in front of you when the payment arrives: spend it once, or let it compound into something that outlasts the job it came from.
Funded schemes are changing the picture#
The traditional gratuity is an unfunded promise sitting on your employer's books until you leave. Some employers now offer a savings scheme that invests your end-of-service benefit as it accrues instead. If your employer offers a funded, invested option, understand it before you opt in or out, because a benefit that compounds for a decade beats a flat sum paid at the end.
Where to go next#
- For the full UAE wealth-building picture, including the dirham peg, brokerages that will not close your account, and the property and Golden Visa question, read the UAE Financial Independence Guide.
- For the global framework behind all of this, including the 3-currencies idea and where end-of-service benefits fit, see the Expat FI Playbook.
- To see what your gratuity becomes if you invest it, run the numbers through the Compound Interest Calculator or the Monte Carlo Retirement Calculator.
