Free Gratuity Calculator in UAE: A Complete EOSB Guide for Employees and Employers (2025–2026)

End-of-service gratuity (EOSB) is a critical financial pillar for anyone working in the Emirates. Whether you are an employee looking to calculate your end-of-service dues or an employer ensuring legal compliance, understanding the latest UAE labour law is essential.

For the UAE 2025 and 2026 period, the rules have shifted toward a more standardized fixed-term contract (limited contract) system. This guide breaks down the gratuity calculation formula, explains the type of contract differences, and provides a free online gratuity calculator workflow to ensure you get an accurate gratuity estimate.

What is gratuity (EOSB) in the UAE?

Gratuity in the UAE is a mandatory financial reward paid to employees who have completed at least one year of service. Managed by the Ministry of Human Resources and Emiratisation (MOHRE), it is designed to provide a "cushion" for expatriates.

The total gratuity you receive is calculated based on your last basic salary. It is important to note that gratuity is based on the basic wage only—it does not include allowances like housing, transport, or utilities.

Why gratuity calculations go wrong so often

Even with an online tool, errors occur. A free gratuity calculator in UAE reduces these mistakes, but you must avoid these common pitfalls:

• Mixing Salaries: Using total salary instead of basic salary (the most frequent error).

• Unpaid Absence: Unpaid leave days are excluded from the length of service calculation.

• Ignoring the Cap: Forgetting that the total number of years cannot result in a payout exceeding two years' salary.

• Wrong End Date: Using the visa cancellation date instead of the actual last working day.

The UAE federal gratuity structure in plain language

This section summarizes the commonly applied federal structure (for the covered category referenced in the federal labour framework) in an easy way. It’s not legal advice, and special jurisdictions may differ, but these are the foundational rules many people are trying to follow when estimating EOSB.

Eligibility often begins after one year of continuous service

Under the federal framework for covered categories, a foreign full-time worker who has completed one year or more of continuous service is entitled to end-of-service benefits calculated according to the basic wage. 

Partial years can be counted proportionately (after meeting the threshold)

If the worker has completed the minimum service threshold, the framework provides for a benefit for parts of the year in proportion to time spent in work. 

Unpaid absence days are not counted in service duration (in the referenced federal rule)

The federal framework states that unpaid days of absence from work are not included in the calculation of the service term for this purpose. 

There is a cap in the referenced federal rule

The referenced federal provision also states that total end-of-service benefits should not exceed two years’ wage. 

Lawful deductions may apply in specific conditions

The referenced federal framework also allows the employer to deduct from end-of-service benefits amounts payable under law or judgment, subject to implementing conditions and procedures.

These points are the backbone of many gratuity estimates. A calculator is useful because it can apply the slabs and prorating logic consistently, as long as the inputs match your documented employment records.

When must gratuity and final dues be paid?

A common concern is timing. Under the federal framework, the employer is required to pay the worker, within 14 days from the end date of the contract term, wages and other entitlements stipulated in the law and its implementing resolutions, the contract, or establishment regulations. 

Practically, this is why employees should keep clear records of contract end dates and last working day documentation, and why employers should run settlement workflows early rather than leaving everything to the final week.

What information you need before using a gratuity calculator

To get a reliable estimate, gather these details first:

1) Your employment dates

• Start date (first working day)

• End date (last working day / contract end date used by HR)

Dates matter because even small differences change the prorated portion of the calculation.

2) Your basic salary

This is the most important number for most standard gratuity estimates under the referenced federal framework, because the benefit is calculated according to the basic wage. 

If your package is “all-inclusive,” confirm what portion is officially treated as basic wage in your contract or salary structure.

3) Any unpaid absence days

If you had days of absence without pay and the referenced federal rule applies to your case, those days may not be counted in the service-term calculation. 

4) Your jurisdiction (very important)

Not every employment relationship in the UAE runs under the same rulebook. For example:

• In DIFC, employers must enroll eligible employees in a qualifying contribution scheme (such as DEWS or a qualifying alternative scheme), and this replaced the statutory end-of-service gratuity scheme previously in place (with transitional considerations for pre-2020 accruals). 

• In ADGM, Employment Regulations 2024 (in force from 1 April 2025) include end-of-service gratuity provisions and also allow an alternative pension or savings scheme option in writing. 

So a “free gratuity calculator in UAE” should be used with a clear scope statement. If you are in a special jurisdiction (or on a savings scheme), your EOSB may not follow the same approach.

How to use a free gratuity calculator in UAE (step-by-step)

Even if different calculators have different layouts, the best practice workflow is usually the same:

Step 1: Enter your start date and end date

Input the first working day and the last working day carefully. If your HR system lists a contract end date that differs from your last day at work, confirm which date is used for settlement in your company policy.

Step 2: Enter your basic salary in AED

Use the basic salary figure from your employment contract or salary certificate. Avoid using the total salary unless your calculator explicitly states that it supports “basic + fixed allowances” and you are sure that matches your policy scope.

Step 3: Add unpaid leave or unpaid absence days if the calculator supports it

If your calculator has a field for unpaid absence, use it. This is one of the most common reasons manual estimates and HR calculations don’t match.

Step 4: Select exit type if your calculator supports it

Some calculators allow choosing resignation or termination to provide more accurate explanation screens. Even if the core formula remains slab-based for the referenced federal rule, exit-type labeling helps users understand what is being estimated.

Step 5: Review the breakdown, not just the total

A reliable calculator should show how it split years into:

• Years counted in the first slab

• Years counted in the second slab

• Prorated portion for partial year (if applicable)

• Any cap impact, if applied

Step 6: Treat the result as an estimate and compare against HR documentation

A calculator result is not a settlement letter. The correct next step is to compare the estimate with:

• Your contract (basic wage figure)

• Your payroll history (last basic wage used where relevant) 

• Leave/unpaid absence records

• HR settlement sheet

UAE Gratuity Calculation Formula

The formula to calculate your end of service gratuity depends primarily on your total tenure and the limited and unlimited contracts framework. For most employees, the standard rate is 21 days of basic salary for each year of the first five years, increasing to 30 days of basic salary for every year thereafter. It is important to note that this calculation is strictly based on your last basic wage, excluding all allowances. While expatriates receive this as a lump-sum end of service benefits package, UAE nationals and GCC citizens are generally excluded from this specific gratuity scheme, as they are instead covered by mandat

Real-life scenarios where a gratuity calculator helps most

Scenario A: Employee resigning after a few years

Employees often want to know what they can expect so they can plan rent, relocation, or job transitions. A calculator quickly shows whether the order of magnitude is reasonable and helps you notice if you mistakenly used total salary.

Scenario B: Long service (more than five years)

This is where slab splitting becomes important. Manual calculations often forget to apply the switch from 21 days per year to 30 days per year after the first five years. 

Scenario C: Unpaid leave history

Even a small number of unpaid absence days can change your service-term calculation if the applicable rule excludes them. 

Scenario D: Salary changed over time

If your basic salary changed, your contract and payroll documents matter because the referenced federal rule points to the “last basic wage” basis for workers paid monthly/weekly/daily. 
A calculator can still estimate, but you need to ensure the salary you enter matches what HR should use.

Common gratuity mistakes (and how to avoid them)

Mistake 1: Using total salary instead of basic salary

This is the most frequent error. If your allowances are large, your estimate can be overstated significantly.

Mistake 2: Entering the wrong end date

Employees sometimes enter visa cancellation date or last day in office, while HR may use the contract end date and notice period structure. Always confirm what your company treats as the end date for settlement.

Mistake 3: Ignoring the cap (where it applies)

Some people assume gratuity grows endlessly with service length. Under the referenced federal rule, total EOSB should not exceed two years’ wage. 

Mistake 4: Not accounting for unpaid absence days

If your case follows the referenced federal rule, unpaid absence days are not included in service-term calculation for gratuity. 

Mistake 5: Treating a calculator as a final settlement document

A calculator helps you estimate and validate. Final settlement depends on HR records, contract terms, and the applicable jurisdiction framework.

Why Use an Online Gratuity Calculator UAE?

Using a uae gratuity calculator is the most efficient way to calculate your gratuity with precision, ensuring you receive the correct gratuity amount upon your end of service. These tools are designed to reflect the latest benefits in the UAE as per the uae labour law, accounting for critical factors like your contract type—whether you are on limited or unlimited contracts. Because gratuity in uae is strictly gratuity based on your last basic salary, a calculator helps you avoid the common mistake of including allowances. Whether you work in dubai, a free zone, or anywhere across the uae, the tool instantly determines if you are eligible for gratuity once you have completed one year of service. It accurately splits your gratuity entitlement into the standard 21-day and 30-day slabs for limited and unlimited arrangements, helping both expatriates and uae nationals—who may have different uae end-of-service or pension schemes—calculate your end of service payouts without manual errors. By using an online tool to pay gratuity estimates, both employers and employees can ensure transparency and minimize disputes during the final settlement process.

What employers should do to stay compliant and reduce disputes

For employers, gratuity is not only a payment. It is a process:

• Keep employment contracts and salary structures clear, especially the definition of basic wage.

• Track unpaid absence days properly and maintain documentation.

• Run EOSB provisioning and budgeting (especially for long-tenured staff).

• Build a standard settlement checklist: salary, leave, EOSB, deductions, documentation, signatures.

• Set internal timelines that respect the 14-day settlement requirement at contract end under the federal framework. 

A strong workflow reduces employee disputes and protects the company in case of complaints or settlement disagreements.

How Young & Right Can Help You with Free Gratuity Calculator in UAE

At Young & Right, we simplify the process of calculating gratuity in the UAE, whether you're an employee planning your end-of-service benefits or an employer ensuring compliance. With our online gratuity calculator for UAE, you can easily estimate your gratuity payment based on your basic salary and service duration.

We help you navigate the complexities of limited vs unlimited contracts and understand the impact of five years of service on your benefits. Our expert team ensures that your gratuity is calculated based on the UAE Labour Law, whether you're calculating for a limited contract or unlimited contract.

Why Choose Us?

• Easily calculate your end-of-service benefits with our tool.

• Get accurate results based on gratuity calculator formula and employment terms.

• Understand the impact of your employment contract on gratuity calculations.

Conclusion

Whether you are in Dubai, Abu Dhabi, or any other emirate, a gratuity calculator for UAE is the fastest way to gain clarity. By ensuring your inputs are compliant with UAE labour law, you can easily calculate your dues and enter your final settlement meeting with confidence.

How Young & Right Can Help: If your gratuity will be calculated as part of a complex settlement involving salary restructuring or disputed absences, we provide professional verification. We help you calculate your UAE gratuity accurately to ensure you receive your full gratuity on time.