Gratuity calculator UAE for private-sector staff

An employee who completes at least one year of continuous service is entitled to gratuity. It is calculated on the last basic wage, without housing, transport or other allowances. Days of unpaid absence do not count toward service, and part years after the first full year are paid in proportion to the time served.

The employer may deduct amounts the employee owes. Gratuity, with other outstanding wages and entitlements, must be paid within 14 days of the end of the contract.

• Under one year of service: no gratuity
• Years one to five: 21 days of basic wage for each year
• Each year after the fifth: 30 days of basic wage
• Total capped at two years of wages

A site engineer at a Dubai contracting company leaves after 7 years and 4 months, with no unpaid leave. His last monthly basic salary is AED 9,000. This example uses a daily wage of basic divided by 30, which is a common convention.

• Daily basic wage: AED 9,000 ÷ 30 = AED 300
• First five years: 21 days × AED 300 × 5 = AED 31,500
• Remaining 2 years 4 months (2.333 years): 30 days × AED 300 × 2.333 = AED 21,000
• Total gratuity: AED 52,500
• Cap check: two years of basic wage is AED 216,000, so the cap does not apply

Some employers and courts work out the daily wage as annual basic salary divided by 365 rather than monthly basic divided by 30. That gives a slightly lower figure, so check the method your contract and HR policy use.

Part-time staff receive a prorated amount under Article 30 of Cabinet Resolution No. 1 of 2022, based on their contracted hours against full-time hours. Temporary work of less than a year carries no gratuity. UAE nationals follow the pensions and social security rules instead. Employers in the voluntary alternative end-of-service savings scheme follow that scheme for the covered periods. Free zones with their own employment regulations, such as DIFC and ADGM, have separate rules.

HelloBooks does not calculate gratuity for you automatically. What it does well is the accounting. Set up an end-of-service provision account and a monthly recurring journal that accrues each employee's estimate, using this calculator or your HR adviser's figure. When someone leaves, the AI agent drafts the settlement entry against the provision and flags any difference for you to approve.

Payroll through HelloTime posts salary journals to HelloBooks, and you can attach the signed final settlement to the payment. If your firm wants a provision schedule by employee in its month-end pack, email hello@hellobooks.ai and the team can build the report.