Gratuity calculator abu dhabi: Everything You Need to Know in 2025
When it comes to end-of-service benefits in the UAE, gratuity pay is one of the most important aspects of employment for both employers and employees. Whether you’re an expat preparing to leave the UAE or an HR professional looking to ensure compliance with labor laws, understanding how gratuity works — and using a reliable gratuity calculator — is essential.
In this comprehensive guide, we’ll cover everything you need to know about the UAE gratuity system in 2025, including the latest updates, calculation methods, eligibility criteria, and how a gratuity calculator can simplify the entire process.
What Is Gratuity calculator abu dhabi?
Gratuity is a lump-sum payment made to employees upon the termination of their contract, provided they have completed at least one year of continuous service with the employer. It is governed by the UAE Labour Law and is designed to reward long-term service.
Gratuity is not a monthly contribution like a pension fund or insurance — it's a one-time benefit calculated based on the employee’s last basic salary and length of service.
Who Is Eligible for Gratuity?
Under UAE Federal Decree Law No. (33) of 2021 and its amendments, an employee is eligible for gratuity if:
- They are employed under a full-time contract (limited or unlimited).
- They have completed at least one year of continuous service.
- Their contract is terminated by the employer or resigned under acceptable conditions (i.e., not for gross misconduct or breach of contract).
Employees terminated for gross misconduct or those who resign before completing one year of service are not eligible for gratuity.
Types of Contracts: Limited vs. Unlimited
Until 2022, UAE labor law recognized both limited and unlimited contracts. However, following recent reforms, all contracts are now considered fixed-term (up to 3 years, renewable), replacing the old contract classification system.
Nevertheless, gratuity calculations still take into account whether the resignation was voluntary or employer-initiated, and the employee’s total length of service.
How Gratuity Is Calculated
Gratuity is calculated based on the employee’s last basic salary (excluding allowances like housing, transportation, or overtime).
Here’s a general outline of the calculation:
For Full-Time Employees:
- 1 to 5 years of service: 21 days’ basic salary for each year of service.
- More than 5 years of service: 30 days’ basic salary for each additional year.
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