End-of-service gratuity isn't just something to work out when someone resigns — for a business, it's a liability that quietly builds up against every employee's tenure from day one. If you run payroll for a team, gratuity should be a line item in your books, not a surprise bill the day a long-serving employee leaves. This calculator gives you the standard unlimited-contract formula, whether you're checking one figure or thinking about provisioning across your whole team.

Gratuity Calculator

Estimate end-of-service gratuity for an unlimited UAE labour contract.

Basic salary only — allowances are usually excluded.
Basis21 days/yr
Estimated gratuityAED 0.00
Minimum one year of service required to qualify.
This calculator gives a planning estimate based on the general end-of-service formula for unlimited contracts. It doesn't account for contract-specific terms or termination-type variations, and rates are subject to regulatory change. For figures you can rely on, talk to our accountant — book a consultation.

Managing this across a whole team is a different problem

Running this calculation for one employee is straightforward. Running it accurately across ten, thirty, or a hundred employees — and keeping the provision current in your books as salaries change and tenures grow — is exactly the kind of ongoing bookkeeping work that gets missed until it's a large, unpleasant number. That's part of what our Accounting & Bookkeeping service handles on an ongoing basis.

Frequently asked questions

For an unlimited contract, gratuity is 21 days of basic salary per year for the first 5 years of service, and 30 days per year for each year beyond that. It's calculated on basic salary only — allowances are usually excluded — and capped at two years' total salary.

Basic salary only. Housing, transport, and other allowances are generally excluded from the gratuity calculation, even if they make up a large share of the employee's total monthly pay.

Yes — an employee needs at least one full year of continuous service to qualify for any end-of-service gratuity under an unlimited contract.

Yes. End-of-service gratuity is a real future liability building up against every employee's tenure, and it should appear as a provision in your financial statements — not just calculated when someone actually leaves. Businesses that skip this often get an unpleasant surprise when several long-tenured staff exit around the same time.

Yes — total gratuity is capped at two years' worth of the employee's basic salary, regardless of how long they've worked beyond that point.