End of Service Calculator
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How Gratuity is Calculated Across the GCC
Updated for 2024–2025 labour laws
End of service gratuity (EOSB) is a mandatory payment employers in all GCC countries must pay when employment ends. The formula differs by country, years of service, and the reason for leaving.
UAE Gratuity Formula (Federal Law No. 33 of 2021)
UAE gratuity is calculated on basic salary only — housing, transport, food, and all other allowances are excluded.
| Service Period | Termination | Resignation |
|---|---|---|
| Under 1 year | No gratuity | No gratuity |
| 1–3 years | Full (21 days/year) | 1/3 of full entitlement |
| 3–5 years | Full (21 days/year) | 2/3 of full entitlement |
| 5+ years (first 5) | Full (21 days/year) | Full (21 days/year) |
| Beyond 5 years | Full (30 days/year) | Full (30 days/year) |
Maximum cap: 2 years' total basic salary. Gratuity is not payable if the employee is terminated for gross misconduct under Article 44.
Worked Example — 7 Years at AED 10,000 Basic
| Calculation Step | Amount |
|---|---|
| Daily basic rate (AED 10,000 ÷ 30) | AED 333.33 |
| First 5 years: 5 × 21 days × AED 333.33 | AED 35,000 |
| Next 2 years: 2 × 30 days × AED 333.33 | AED 20,000 |
| Total gratuity | AED 55,000 |
GCC Country Comparison
| Country | Formula (First 5 yrs) | Formula (After 5 yrs) | Resignation Penalty |
|---|---|---|---|
| 🇦🇪 UAE | 21 days/year | 30 days/year | 1/3 – 2/3 before 5 yrs |
| 🇸🇦 Saudi | ½ month/year | 1 month/year | 1/3 – 2/3 before 10 yrs |
| 🇰🇼 Kuwait | 15 days/year | 30 days/year | 0 if under 5 yrs |
| 🇶🇦 Qatar | 21 days/year | 30 days/year | 0 if under 1 yr |
| 🇧🇭 Bahrain | ½ month/year | 1 month/year | 0 if under 1 yr |
| 🇴🇲 Oman | 15 days/year | 30 days/year | 0 if under 1 yr |
Free Zone Employees (DIFC & ADGM)
The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) operate under their own employment laws:
- DIFC: Employees hired after February 2020 are enrolled in the DIFC Employee Workplace Savings (DEWS) scheme — a funded savings plan replacing traditional gratuity. Contributions: 5.83% of monthly basic (under 5 years) or 8.33% (5+ years)
- ADGM: Follows the ADGM Employment Regulations 2019 with a minimum gratuity of 21 days per year based on basic salary, with no resignation penalty after 1 year
- Other free zones (JAFZA, DAFZA, Sharjah FZ, etc.) follow the UAE Federal Labour Law unless their own charter specifies otherwise
What to Do If Your Employer Withholds Gratuity
Under UAE Labour Law, your employer must pay all end-of-service entitlements within 14 days of your last working day. If they fail to do so:
- Send a formal written demand by email, keeping a copy
- File a complaint with MOHRE — call 800-60 or use the MOHRE app (free, resolves most disputes in 2–4 weeks)
- If MOHRE mediation fails, the case is referred to the Labour Court automatically at no filing cost to you
- Courts may award interest and legal costs in addition to the unpaid gratuity
Gratuity FAQ
Most common questions about UAE end-of-service benefits
Is gratuity calculated on basic or total salary?+
Basic salary only. Housing allowance, transport allowance, food, phone, and all other allowances are excluded. This is mandated by UAE Federal Labour Law No. 33 of 2021.
Do I get gratuity if I resign before 1 year?+
No. In the UAE, no gratuity is payable if your total service is under 1 year, regardless of the reason for leaving. This applies whether you resign or are terminated (except if terminated without cause — always check with MOHRE).
Can my employer deduct money from my gratuity?+
Employers may deduct from gratuity amounts owed to them under specific conditions: unpaid rent (if accommodation was provided), court judgments, and company property costs. They cannot deduct for job performance or business losses. If you're concerned, file a complaint with MOHRE before you receive your final payment.
Is there a maximum gratuity limit?+
Yes. The UAE caps gratuity at 2 years' basic salary, regardless of how many years you have worked. So an employee with 20 years of service earning AED 10,000/month is still capped at AED 240,000.
What happens to gratuity if my company closes or goes bankrupt?+
Gratuity and unpaid wages are classified as priority debts under UAE insolvency law — they rank ahead of most other creditors. You should immediately file a complaint with MOHRE if your employer enters insolvency, which triggers a formal protection process for employees.
Does my DIFC employer pay traditional gratuity?+
No, for employees hired after February 2020. DIFC uses the DEWS (Workplace Savings) scheme — your employer contributes 5.83% or 8.33% of basic monthly salary into a fund, which you receive regardless of how you leave. This is generally a better deal than the traditional gratuity system.