5 August 2026 · Calculation
How Gratuity Is Calculated
UAE gratuity is calculated on the last basic wage, not the gross package. Convert the monthly basic to a daily rate by dividing by 30, then apply 21 days for each of the first five years and 30 days for each year after that, pro-rating part-years once one full year is complete. On a basic of AED 12,000 the daily rate is AED 400, so five years earns AED 42,000 and each further year adds AED 12,000. The total is generally capped at two years' pay, and no gratuity is due below one year of service. Confirm the current day-count with MOHRE before you rely on it.
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21 days, then 30
Two rates by length of service.
- 21 days' basic per year, first five years.
- 30 days' basic per year after that.
- Daily rate is basic divided by 30.
- Part-years pro-rated after year one.
Last basic wage
Allowances do not count.
- Runs off basic wage only.
- Housing and transport excluded.
- Uses the wage at the point of leaving.
- Read the contract's basic figure.
Gate and cap
One year in, two years out.
- No gratuity under one year of service.
- Unpaid absence is not counted.
- Total capped at two years' pay.
- Verify current rules with MOHRE.
Frequently Asked Questions
For calculating gratuity.
What is the gratuity formula in the UAE?
21 days' basic wage for each of the first five years and 30 days for each year after, on the last basic wage, using a daily rate of basic divided by 30.
Is gratuity on basic or gross salary?
Basic wage only. Allowances such as housing and transport are excluded from the calculation.
How do I turn my monthly basic into a daily rate?
Divide the monthly basic wage by 30. On AED 12,000 basic, the daily rate is AED 400.
Are part-years counted?
Yes, pro-rata, once you have completed one full year of service. Below one year, no gratuity is due.
Is there a maximum gratuity?
The total is generally capped at two years' pay. Confirm the current cap with MOHRE for long-service settlements.
Can Exiloz check my gratuity figure?
Yes. We calculate it off the correct basic wage and service dates and confirm it against the Labour Law.
Check your gratuity number
Exiloz calculates gratuity off the correct basic wage and dates.