UAE Gratuity Calculation Examples: Correct Last-Wage Method

Correction, 7 October 2026: This guide has been revised to remove unsupported salary-band calculations, automatic old/new-law splits and assumptions that DIFC and ADGM share the same benefits system.

Each example below is illustrative, not a real client outcome. Check the governing law and facts before applying it to your own settlement.

ScenarioAssumptionsGratuity (AED)
Under one year0.5 qualifying years; AED 10,000 last basic0
Three years3 qualifying years; AED 10,000 last basic21000
Six years after a rise6 qualifying years; AED 11,500 last basic; earlier basic AED 9,00051750
Partial year5.5 qualifying years; AED 10,000 last basic40000
Ten years10 qualifying years; AED 10,000 last basic85000

A salary rise is not a new segment

The six-year example uses the last AED 11,500 basic wage for all qualifying service. Earlier wage records establish the change; they do not produce separate historical wage portions.

Add settlement components separately

Ten unused leave days at AED 10,000 monthly basic produce an illustrative AED 3,333.33. Thirty unserved notice days owed by the employer at AED 15,000 total monthly wage produce AED 15,000. Earned unpaid pay and confirmed contractual dues are separate. Do not count notice already included in paid salary twice.

The standard federal calculation

For a foreign full-time employee under federal private-sector law, Article 51 uses the last basic wage: 21 days for each of the first five qualifying years, then 30 days for each additional year. After one year of continuous service, fractions of a year are counted proportionately. Unpaid absence is excluded from the gratuity service calculation. Housing and transport allowances are not part of the basic-wage calculation. The statutory ceiling is two years’ wage; keep the distinction between basic wage and total contractual wage clear.

Check which rules apply before using a calculator

DIFC’s DEWS or another qualifying scheme, ADGM employment regulations and the federal alternative Savings Scheme have distinct rules. Part-time work needs its contractual hours ratio; domestic, government and pension-covered employment are outside this standard calculation. Use the free-zone comparison to identify your arrangement.

Compare an itemised breakdown

Use the Final Settlement Checker for a standard federal monthly-paid case. Ask HR for the wage basis, qualifying service, unused leave, notice position, earned pay and each proposed deduction. A calculator estimate is a starting point for questions, not a decision on your legal entitlement.

Reviewed 7 October 2026. General information, not personalised legal advice. If the contract, service continuity, salary change or deduction is disputed, confirm the facts with the relevant authority or a qualified employment adviser.

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