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

Basic monthly salary (AED) — excluding allowances

AED → INR rate (for NRI conversion, optional)

Years of service (completed)

Extra months beyond full years

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

For the roughly 3.5 million Indians working in the UAE, the bigger question after the payout is what happens when the money reaches India. There is no UAE tax on gratuity — the UAE levies no personal income tax — but the India side has a few rules worth knowing.

India tax treatment of UAE gratuity

Gratuity earned for services rendered in the UAE while you are a non-resident (NRI) is not taxable in India. It is foreign-sourced income earned during non-residency, so it falls outside the Indian tax net. The safest way to bring it home is to remit it into an NRE account, which keeps both the principal and the future interest fully tax-free and freely repatriable. If you are unsure of your residency status for the year, check your India slab rate on our income tax calculator — only India-sourced income (like rent or NRO interest) is taxable for an NRI.

TCS on repatriation

Tax Collected at Source (TCS) on foreign remittances applies to money sent out of India under the Liberalised Remittance Scheme — it does not apply to gratuity you bring into India. Inward remittances of your own foreign earnings into an NRE or NRO account carry 0% TCS. You only encounter TCS later if you remit funds abroad again from India above the annual threshold — our TCS on remittance calculator works out exactly how much in that case.

NRE vs NRO account for gratuity

Credit the gratuity to an NRE account wherever possible: it is rupee-denominated, fully repatriable, and the interest is tax-free in India. An NRO account is meant for India-sourced income (rent, dividends) and its interest is taxable with TDS — so it is the wrong home for foreign gratuity unless your bank has no other option at the time of credit.

UAE gratuity in rupees

To convert your gratuity into rupees, multiply the AED figure by the current AED-to-INR rate (around ₹23–24 per AED). An AED 52,000 payout is roughly ₹12 lakh; AED 108,000 is roughly ₹25 lakh. Lock in a favourable rate through your bank or a regulated remittance service rather than airport exchange counters, which carry the worst spreads.

Saudi gratuity vs UAE — and India's own rule

If you have worked across the Gulf, note the formulas differ. Our Saudi Arabia gratuity calculator uses the KSA half-month/full-month split, while jobs in India follow the Payment of Gratuity Act — (15/26) × last salary × years after 5 years of service — covered in our India gratuity calculator. Don't mix up the three.

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.