Gratuity Calculation in the UAE

In the UAE, calculating gratuities is a crucial HR department task. With the support of our leave management software, providing the proper gratuity payment according to calculations will be easier.
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Limited or Fixed Term Contract

For each year of service under a short-term contract that is less than 5 years. However, if the employee has been operating for the company for less than a year, they are not eligible for gratuity. On the other hand, for each year of work above 5 years, a worker gets 21 days of income, with a limit of 2 years’ salary.

Unlimited Contract

Knowing who The computation of gratuities for unlimited contracts varies depending on the circumstances and the number of years of service. For instance, if the worker resigns after 1 to 3 years of service, they receive 1/3rd of the 21-day basic wage for every year. However, if the employer terminates them they receive full payment.


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Know the employee’s basic salary

Knowing the minimum wage is necessary. This is the base pay for an employee, not including any bonuses, compensation, housing, transportation, or other perks. Gratuity will always be calculated using the employee's base pay.

Calculate the daily wage

You can figure out the daily wage once you have the basic income. The basic income can convert to a daily wage by dividing it by 30 (the average number of days at work in a month). You can now determine the gratuity according to the type of contract and the number of years of service. In this case, you would basically have to multiply each day's compensation by the appropriate number of days if the worker is bound by a short-term or renewable contract.

Get Started with Connect HR

Use ConnectHR Gratuity Calculator


Choosing our leave management software allows you to have access to a gratuity calculator.


With our solution, you can automate gratuity calculations and streamline other HR processes.


Our software automates certain tasks, such as time-off management, payroll processing, and more.


Keep your compliance with our support and make the most out of our gratuity calculator.


Connect HR allows you to quickly see what you need to provide as gratuity for your employees.

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