An end-of-service calculator can produce a number in seconds. The difficult part is deciding whether the inputs are correct.
For expatriate workers in standard full-time private-sector employment, the UAE Government’s official portal says gratuity is calculated on the last basic salary, excluding allowances such as housing and transport. A worker generally needs at least one year of continuous service. Unpaid absence is excluded from the service period. Fractions of a year are calculated proportionately after the first continuous year has been completed.
The official calculation is:
- less than one year of service: no statutory gratuity under this formula;
- more than one year and up to five years: 21 days of basic salary for each year; and
- more than five years: 21 days for each of the first five years, then 30 days for each following year.
The total gratuity cannot exceed two years’ wage.
A transparent estimate, not a magic number
For a full-time worker, a simple estimate begins with a daily basic wage:
monthly basic salary ÷ 30
That daily figure is multiplied by the relevant gratuity days for the service period. For example, the first five years use 21 days per year. Service after five years uses 30 days per year. Any eligible fraction of a year is calculated proportionately.
An online result should always show its inputs and working. A user should be able to see:
- employment start date;
- employment end date;
- final monthly basic salary;
- unpaid-absence days deducted;
- full-time, part-time or other work pattern;
- whether the employer enrolled the worker in the alternative Savings Scheme; and
- any amount the user says has already been paid.
If a calculator hides these assumptions, the final figure may look more certain than it is.
Common reasons estimates differ
Basic salary was confused with total salary. The statutory formula described on the official portal uses basic salary, not the full package with allowances.
Unpaid leave was not deducted. Days of unpaid absence do not count in the service calculation under the official guidance.
The person works part-time or under another work pattern. The implementing rules use a proportional calculation based on contracted hours. A standard full-time calculator can therefore be unsuitable.
The employer uses the alternative Savings Scheme. For enrolled employees, the employer makes contributions to an approved investment fund in place of the traditional gratuity for the enrolled period. Accrued gratuity before enrolment should be calculated and settled in accordance with the scheme rules.
Another employment regime applies. Government employment, domestic work and financial free zones can have different rules. A generic private-sector estimate should not be used as if it covers every UAE worker.
What to check at the end of employment
Keep the contract, salary record, start and end dates, leave record, termination or resignation correspondence and any final-settlement sheet. The official portal says outstanding wages, other entitlements and gratuity should be paid within 14 days after termination of the contract. It also notes that amounts lawfully owed by the worker may be deducted from gratuity.
If the employer’s calculation differs, ask for the written working rather than arguing only about the total. Compare each input. A disagreement about the start date or basic salary is easier to explain when it is separated from a disagreement about the legal formula.
Responsible calculator design
A useful platform calculator should label the result estimate, link to the official source, show the calculation line by line and ask screening questions before producing a figure. It should stop and route the user for a more suitable review if the worker is in a different regime, has less than a year of service, has an unclear basic salary, was enrolled in the Savings Scheme, or has disputed unpaid-absence days.
Frequently asked questions
Is gratuity calculated on basic salary or total salary?
For the standard expatriate full-time private-sector calculation described by the UAE Government, it is based on the last basic salary and excludes allowances.
Do I receive gratuity after less than one year?
The official guidance says a worker with less than one year of continuous service is not entitled under the standard formula.
What happens after five years?
The first five years are calculated at 21 days of basic salary per year; service after the first five years is calculated at 30 days per year.
Is an online calculator a final settlement?
No. It is an estimate based on the information entered. The employment regime, contract, leave record, Savings Scheme status and disputed facts can change the result.