UAE End of Service Calculator — EOSB Gratuity 2024

Understanding UAE end of service benefits — commonly referred to as EOSB or gratuity — is essential for every employee working in the UAE private sector. Whether you are planning to resign, approaching the end of a contract, or simply want to know what you are entitled to, this guide explains the calculation rules, legal framework, and common scenarios in plain language. ## What Is UAE End of Service Gratuity? End of service gratuity is a mandatory payment that UAE private sector employers must make to employees at the conclusion of their employment relationship. It is governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, as amended by Cabinet Resolution No. 1 of 2022. The gratuity serves as a form of financial protection for employees leaving employment, functioning similarly to a severance or terminal benefit payment found in other countries. The gratuity is calculated based on the employee's basic salary — not the total package — and the number of completed years of service. This distinction is critical: housing allowances, transport allowances, commissions, bonuses, and any other supplementary payments are excluded from the gratuity base. ## UAE EOSB Calculation Formula The UAE end of service benefits calculation follows a tiered formula: * **First 5 years of service**: 21 working days of basic salary per completed year * **Beyond 5 years**: 30 working days of basic salary per completed year * **Minimum service**: 1 full year of continuous service is required to be eligible * **Maximum cap**: Total gratuity cannot exceed 2 years of basic salary The daily rate used in the calculation is the basic monthly salary divided by 30. For example, if your basic monthly salary is AED 10,000, your daily rate is AED 333.33. For four years of service, your gratuity would be 4 × 21 × 333.33 = AED 28,000. For employees with more than five years of service — say, eight years — the calculation splits into two tiers: 5 × 21 × daily rate (for the first five years) plus 3 × 30 × daily rate (for the remaining three years). ## Limited vs Unlimited Contracts and EOSB One of the most commonly misunderstood aspects of UAE gratuity law is how contract type affects entitlement. **Limited (fixed-term) contracts** — which are now the standard contract type following the 2022 labour reforms — entitle employees to full gratuity regardless of whether they resign voluntarily or are terminated by the employer. This was a significant change introduced to align with global best practices and provide greater employee protection. **Unlimited (indefinite) contracts** — a legacy contract type that existed before the 2022 reforms — follow different rules specifically when an employee resigns. Under these older rules: * Resignation after 1–3 years: one-third (1/3) of full gratuity * Resignation after 3–5 years: two-thirds (2/3) of full gratuity * Resignation after 5+ years: full gratuity Employees on unlimited contracts who are terminated by their employer — rather than resigning — are entitled to full gratuity regardless of tenure. Employers were required to transition existing unlimited contracts to limited-term contracts by February 2023. ## EOSB Calculation Dubai and All Emirates The UAE end of service calculator Dubai follows the same federal formula as the rest of the UAE. Federal Decree-Law No. 33 of 2021 applies across all seven emirates — Dubai, Abu Dhabi, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah — for private sector employees. There is no emirate-specific variation in the gratuity formula. Free zones in Dubai and other emirates, with the exception of DIFC and ADGM, also follow the federal law for EOSB purposes. The Dubai International Financial Centre and Abu Dhabi Global Market operate under their own employment regulations, which include employee savings schemes as alternatives to traditional gratuity. ## How to Calculate End of Service Benefits in UAE: Step by Step Using the EOSB calculator above is the fastest approach, but understanding the manual calculation steps helps you verify results and understand deductions: 1. **Identify your basic salary**: Check your employment contract for the basic salary figure. Exclude all allowances. 2. **Calculate your daily rate**: Divide basic salary by 30. 3. **Calculate service duration**: Count completed years from your joining date to your end date. 4. **Apply the tiered formula**: 21 days/year for the first five years, 30 days/year beyond five. 5. **Apply reductions if applicable**: Only relevant for unlimited contracts with resignation (see above). 6. **Check the 2-year cap**: Ensure the result does not exceed 24 months of basic salary. The result is your gross gratuity entitlement. Note that your employer may legally offset certain amounts — such as outstanding loans from the company or court-ordered deductions — against the gratuity, though the tool does not account for these. ## End of Service Benefits UAE Law: Key Articles The primary legal references for UAE EOSB are: * **Article 51** of Federal Decree-Law No. 33 of 2021: Sets out the gratuity entitlement, tiers, and minimum service period. * **Cabinet Resolution No. 1 of 2022**: Executive regulations clarifying contract transitions and calculation methods. * **Article 53**: Addresses the timeline for payment and employer obligations. The Ministry of Human Resources and Emiratisation (MOHRE) is the authority responsible for enforcing these provisions. Employees who believe their gratuity has been miscalculated or withheld can file a complaint via the MOHRE platform or Tasheel service centres. ## End of Service Benefits: Unlimited Contract vs Limited Contract Comparison | Scenario | Limited Contract | Unlimited Contract | |---|---|---| | Terminated by employer | Full gratuity | Full gratuity | | Resignation (1–3 yrs) | Full gratuity | 1/3 gratuity | | Resignation (3–5 yrs) | Full gratuity | 2/3 gratuity | | Resignation (5+ yrs) | Full gratuity | Full gratuity | | Contract expiry | Full gratuity | Full gratuity | This table highlights why the 2022 shift to limited contracts significantly improved protections for employees who choose to resign. ## Common Questions About UAE Gratuity Calculations **Does unpaid leave affect gratuity?** Yes. Periods of unpaid absence are typically excluded from the service period calculation. If you have taken unpaid leave, you should reduce your total service duration accordingly before using the calculator. **What if I was on a part-time contract?** Part-time employees are entitled to gratuity on a pro-rata basis, calculated in proportion to the hours worked compared to a standard full-time position. **Is gratuity taxable in the UAE?** No. The UAE does not impose personal income tax, so end of service gratuity is received in full without any tax deduction. **Can an employer withhold gratuity?** Employers may legally deduct amounts owed by the employee (e.g., loans, equipment costs) from the gratuity, but they cannot withhold the entire payment without cause. Disputes can be raised with MOHRE. **What is the payment deadline for UAE gratuity?** Employers must pay all end of service entitlements within 14 days of the employee's last working day. ## Using the UAE End of Service Calculator This uae eosb calculator is designed to give you an instant, accurate estimate based on your inputs. Enter your basic monthly salary, joining date, end of service date, contract type, and reason for leaving. The tool applies the correct legal formula automatically and shows you a full breakdown — including daily rate, years in each tier, any applicable reductions, and the final capped amount. The calculator is suitable for both employees and HR professionals who need to quickly compute end of service benefits in UAE across different contract scenarios. Results are displayed in AED and include a payment timeline reminder. For official verification of your entitlement, use the MOHRE calculator available on the UAE government portal at u.ae, or consult a qualified employment lawyer or HR advisor.