When I built a UAE end-of-service gratuity calculator, I did what most developers do first: I looked at the existing calculators and copied the shape of their logic. That was a mistake — because most of them implement a law that stopped existing in February 2022.

Here is the correct model, the edge cases that matter, and how I encoded it.

The legal model (Article 51, Federal Decree-Law 33/2021)

Gratuity for a full-time foreign employee in the UAE mainland private sector:

  • Based on the last basic salary only — housing, transport and every other allowance are excluded.
  • Daily wage = monthly basic ÷ 30.
  • First five years: 21 days of basic wage per year.
  • Every year after the fifth: 30 days per year.
  • A part-year after the first year counts pro-rata.
  • Cap: the total cannot exceed 24 monthly basic salaries (two years' wage).
  • Below one year of service, statutory gratuity is zero. 
gratuity = min( basic/30 × 21 × min(years,5) + basic/30 × 30 × max(years-5,0), 24 × basic )

The 2022 change most calculators still get wrong

Before 2 February 2022 the UAE had "limited" and "unlimited" contracts, and resigning under a limited contract could cut your gratuity to one-third or two-thirds. Decree-Law 33/2021 abolished that system. Today all private-sector contracts are fixed-term, and resigning does not reduce gratuity at all.

So if a calculator asks you for a contract type, or applies a resignation penalty, it is calculating a repealed law. In code terms: there is no contractType field and no resignationFactor. Deleting those two inputs was the single most valuable change in the whole project.

Two test cases I use

Case 1 — basic AED 8,000, 4 years.
Daily wage = 266.67. All four years are in the first band: 266.67 × 21 × 4 = AED 22,400. Cap check: 24 × 8,000 = 192,000 — not reached.
Sanity trap: run the same formula on a full package of AED 14,000 (basic + allowances) and you get AED 39,200 — wrong input, wrong answer. The UI has to make "basic salary, as printed on your payslip" unmissable.

Case 2 — basic AED 15,000, 9 years, resigns.
First five years: 500 × 21 × 5 = 52,500. Remaining four: 500 × 30 × 4 = 60,000. Total AED 112,500 — identical whether the employer ends the contract or the employee resigns. Under the pre-2022 rules this is exactly the case that used to lose a third of its value.

The exceptions you must not silently ignore

  • DIFC and ADGM run their own regimes (workplace savings schemes such as DEWS) instead of Article 51 gratuity.
  • Domestic workers are under a separate law; UAE nationals are in the pension system.
  • Some employers have moved staff to the voluntary alternative savings scheme — those employees follow the scheme, not the formula.
  • Article 53: the employer must pay end-of-service entitlements within 14 days of the contract ending.

A responsible calculator says these things on the page instead of pretending one formula covers everyone.

The working calculator

The finished tool, plus the full guide with sources, lives here:

No sign-up, and all inputs stay in the browser. If you maintain anything similar — payroll tools, HR templates, expat guides — it is worth ten minutes to check whether your logic still contains a contract-type question. If it does, your users are being under-quoted by a law that no longer exists.