What’s the correct way to calculate end of service benefits in UAE?

[josh_Joee]

Hi all,
I’m looking for a clear explanation of how end-of-service gratuity is calculated in the UAE. Some people say allowances are included, others say it’s only on basic salary.

If anyone knows the official rule or formula as per UAE Labour Law 2025, please share.
Also, I came across a simple online calculator that seems to match MOHRE’s rules:  Is it accurate based on your experience?

[jason0655]

Calculating end-of-service gratuity in the UAE can be confusing, but the basic principle from the UAE Labour Law is fairly consistent: you calculate it based on your last basic salary and years of service once you’ve completed at least one full year of continuous work.

Typically under the current law:

• You earn 21 days of basic salary for each year up to the first 5 years, and

• 30 days for each additional year after that.
  Allowances like housing or transport usually don’t count in the basic gratuity calculation, and the total amount is capped at 2 years’ basic salary.

Many employees find it useful to double-check their numbers using an online gratuity calculator designed specifically for the UAE rules — especially when dealing with join/leave dates and different contract types. These tools help you avoid surprises and make sure you know what you’re legally entitled to receive from your employer when you leave.

[clandriver013]

20 hours ago, jason0655 said:

Calculating end-of-service gratuity in the UAE can be confusing, but the basic principle from the UAE Labour Law is fairly consistent: you calculate it based on your last basic salary and years of service once you’ve completed at least one full year of continuous work.

Typically under the current law:

• You earn 21 days of basic salary for each year up to the first 5 years, and

• 30 days for each additional year after that.
  Allowances like housing or transport usually don’t count in the basic gratuity calculation, and the total amount is capped at 2 years’ basic salary.

Many employees find it useful to double-check their numbers using an online gratuity calculator designed specifically for the UAE rules — especially when dealing with join/leave dates and different contract types. These tools help you avoid surprises and make sure you know bookkeepers in san francisco what you’re legally entitled to receive from your employer when you leave.

The correct way to calculate end of service benefits (EOSB) in the UAE depends mainly on the employee’s basic salary, length of service, and type of contract. For employees who have completed at least one year of continuous service, EOSB is calculated based on basic salary only (excluding allowances).