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Updated June 2026
UAE Gratuity Calculator — End-of-Service Pay, MOHRE Formula
Leaving a job in the UAE? Your end-of-service gratuity is 21 days of basic salary per year for the first five years, and 30 days per year after that — same formula whether you resign or are terminated (the old reduced-gratuity rule for resignation ended in February 2023). Enter your basic salary and service period for the exact MOHRE-formula amount, in AED and INR.
🇦🇪 Calculate End-of-Service Gratuity
Gratuity (AED)
In INR
Equivalent months of basic
Formula per UAE Labour Law (Federal Decree-Law 33/2021): daily wage = basic ÷ 30. Capped at 2 years' basic salary. Minimum 1 year of service required. Unpaid leave days don't count as service.
⚠️ Disclaimer: CalcSmart is not a tax, financial, legal or medical advisor. Calculators and content here are for general information only, compiled from publicly available rules and rates that change frequently. Always verify the accuracy and freshness of figures with official sources (e.g. incometax.gov.in, cbic.gov.in, your bank) or a qualified professional before acting on any result.
How UAE Gratuity Is Calculated
Under the UAE Labour Law (Federal Decree-Law No. 33 of 2021, in force since February 2022):
- Years 1–5: 21 calendar days of basic salary per year → (basic ÷ 30) × 21 × years
- Beyond 5 years: 30 days per additional year → (basic ÷ 30) × 30 × (years − 5)
- Partial years count pro-rata after the first full year. Cap: total gratuity can't exceed 2 years' basic salary. Minimum: 1 year of service.
- Basic salary only — housing, transport and other allowances are excluded. This is why employers structure pay with low basic; check what your contract calls "basic".
- Resignation = termination: since 1 February 2023, both get the full formula. The old rule that cut gratuity to 1/3 or 2/3 for resigning employees on unlimited contracts is gone.
- Payment deadline: within 14 days of the end of the contract.
Example
| Service | Basic AED 8,000/month |
|---|---|
| 3 years | (8000÷30) × 21 × 3 = AED 16,800 |
| 5 years | (8000÷30) × 21 × 5 = AED 28,000 |
| 8 years | 28,000 + (8000÷30) × 30 × 3 = AED 52,000 |
| 15 years | 28,000 + (8000÷30) × 30 × 10 = AED 108,000 (under the 2-year-basic cap of AED 192,000) |
For Indian Expats: Taking Gratuity Home
- No UAE tax on gratuity — the UAE has no personal income tax.
- No Indian tax for NRIs: gratuity earned for services rendered in the UAE while you're non-resident is not taxable in India. Remit it to an NRE account to keep both the principal and future interest tax-free and freely repatriable.
- Returning to India for good? Money received after you become resident can complicate things — receive your end-of-service dues while still NRI where possible, and use an RNOR window if you qualify.
- India's own gratuity rules differ: for jobs in India, the Payment of Gratuity Act uses (15/26) × last salary × years after 5 years of service — don't mix up the two formulas.
Frequently Asked Questions
21 days of basic salary per year for the first five years of service, then 30 days per year after five years. Daily wage = basic monthly salary ÷ 30. The total is capped at two years' basic salary, requires at least one year of service, and is based on basic pay only — allowances are excluded.
Yes. Since 1 February 2023 the formula is identical for resignation and termination. The old rule reducing resigning employees' gratuity to one-third or two-thirds applied to the abolished unlimited contracts and no longer exists.
Not for NRIs — end-of-service benefits earned for employment in the UAE while you are non-resident in India are not taxable in India, and the UAE levies no personal income tax. Remit the amount to an NRE account to keep it freely repatriable with tax-free interest. Plan the timing carefully if you're moving back to India permanently.
Basic salary only, as defined in your employment contract. Housing, transport, and other allowances are excluded. If your AED 12,000 package has an AED 6,000 basic, gratuity is computed on 6,000 — a major reason to scrutinise the basic/allowance split before signing.
Within 14 days of your contract end date, along with all other end-of-service entitlements, under Article 53 of the UAE Labour Law. Delays can be escalated to MOHRE.
Days of unpaid leave don't count as days of service, so extended unpaid leave slightly reduces the service period used in the formula — but it doesn't break continuity of service.