Dubai vs Abu Dhabi Gratuity Calculator Guide 2025
Dubai and Abu Dhabi use identical gratuity calculation rules under UAE Labour Law. Both emirates follow the same 21-day and 30-day salary formulas. The main differences occur in special free zones like DIFC and ADGM.
This guide explains gratuity calculators in both emirates, special zone rules, calculation differences, and which tools provide accurate results for your specific situation.
Do Dubai And Abu Dhabi Have Different Gratuity Rules?
No, Dubai and Abu Dhabi follow identical UAE Labour Law gratuity rules for mainland workers. Federal Decree Law No. 33 of 2021 applies to both emirates without regional variations.
Both emirates calculate gratuity using:
- 21 days’ basic salary per year for first 5 years
- 30 days’ basic salary per year after 5 years
The calculation depends on three factors: basic salary amount, service duration, and contract type (limited or unlimited).
If you need guidance on how to calculate gratuity in UAE, the same principles apply across all seven emirates.
What Makes Free Zone Calculations Different?
Free zones in Dubai and Abu Dhabi can have unique gratuity systems that override standard UAE rules. DIFC uses monthly contributions instead of end-of-service lump sums. ADGM follows standard UAE calculations.
DIFC’s Monthly Contribution System
DIFC replaced traditional gratuity with the Dubai Employee Workplace Savings (DEWS) scheme in January 2020. Employers contribute monthly percentages based on service years:
- 5.83% of basic salary for employees with 1-5 years service
- 8.33% of basic salary for employees with 5+ years service
Example: Employee earning AED 10,000 monthly with 3 years service receives AED 583 monthly contributions (10,000 x 5.83%).
ADGM’s Standard Approach
ADGM follows UAE Labour Law gratuity calculations. Employees receive traditional lump-sum payments when leaving employment. ADGM has not implemented a mandatory savings scheme like DIFC.
Which Gratuity Calculators Work Best For Each Emirate?
Standard UAE gratuity calculators work accurately for both Dubai and Abu Dhabi mainland employees. DIFC workers need specialized DEWS calculators due to their contribution-based system.
Government Calculator Options
Dubai Development Authority Calculator:
- Official Dubai government tool
- Free access for all users
- Based on current UAE Labour Law
Gulf News Calculator:
- Popular media platform tool
- Works for all UAE emirates
- Simple input interface
Private Calculator Platforms
Zoho Payroll Calculator:
- Professional HR management tool
- Handles complex employment scenarios
Bayzat Calculator:
- UAE-based payroll company
- Business-focused calculations
Most standard calculators cannot process DIFC’s DEWS contributions. DIFC employees should consult HR departments for accurate calculations.
How Do Contract Types Affect Calculations In Both Emirates?
Contract type determines gratuity amounts for employees who resign before completing 5 years of service. Both Dubai and Abu Dhabi apply identical contract rules under UAE Labour Law.
Limited Contract Calculations
Limited contracts have fixed end dates and specific durations. Employees receive full gratuity regardless of resignation or termination after one year of service.
Calculation formula:
- Years 1-5: Basic salary ÷ 30 × 21 × service years
- Years 6+: Basic salary ÷ 30 × 30 × additional years
Unlimited Contract Calculations
Unlimited contracts have no fixed end dates. Early resignation reduces gratuity amounts based on service duration.
Resignation gratuity rates:
- 1-3 years service: 1/3 of full gratuity amount
- 3-5 years service: 2/3 of full gratuity amount
- 5+ years service: Full gratuity amount
What Are The Step-By-Step Calculation Examples?
Gratuity calculations use basic salary, service years, and departure reason to determine final amounts. These examples show identical calculations for both Dubai and Abu Dhabi mainland employees.
Example 1: Standard Employee Resignation
Employee details:
- Basic salary: AED 8,000 monthly
- Service duration: 4 years
- Contract type: Unlimited
- Departure: Voluntary resignation
Calculation steps:
- Determine gratuity rate: 4 years = 2/3 rate (between 3-5 years)
- Calculate base amount: (8,000 ÷ 30) × 21 × 4 = AED 22,400
- Apply reduction: 22,400 × 2/3 = AED 14,933
Example 2: Long-Service Termination
Employee details:
- Basic salary: AED 6,000 monthly
- Service duration: 7 years
- Contract type: Limited
- Departure: Company termination
Calculation steps:
- First 5 years: (6,000 ÷ 30) × 21 × 5 = AED 21,000
- Additional 2 years: (6,000 ÷ 30) × 30 × 2 = AED 12,000
- Total gratuity: 21,000 + 12,000 = AED 33,000
What Common Calculation Mistakes Should You Avoid?
Using total salary package instead of basic salary creates the most frequent calculation errors. UAE Labour Law excludes allowances, bonuses, and benefits from gratuity calculations.
Salary Components To Exclude
Gratuity calculations must exclude these payment types:
- Housing allowances
- Transportation allowances
Overtime payments, bonuses, commissions, and other benefits do not count toward gratuity calculations.
Service Period Calculation Errors
Unpaid leave periods reduce total service duration. Sabbaticals, extended sick leave, and unpaid absences must be subtracted from service calculations.
Contract Type Confusion
Limited and unlimited contracts have different resignation penalties. Check employment contracts to verify contract classification before calculating gratuity amounts.
What New Rules Apply In 2025?
The 2025 UAE Labour Law eliminates early resignation penalties for most workers. Both Dubai and Abu Dhabi now provide fairer gratuity treatment regardless of departure reasons.
Voluntary Savings Scheme Option
MoHRE introduced optional employer participation in investment-based gratuity schemes in November 2023. Employers can contribute monthly amounts to managed funds instead of paying lump-sum gratuity.
This system remains voluntary for most employers outside DIFC. Workers keep accumulated contributions plus investment returns when leaving employment.
14-Day Payment Requirement
All end-of-service payments must be completed within 14 days of contract termination. This applies to both emirates and all employment sectors.
For current regulations, review what is the new law of gratuity in UAE for complete details.
Which Calculator Should You Choose?
Choose calculators based on your employment location and contract type. Standard UAE tools work for mainland employees, while free zone workers need specialized calculators.
Dubai Mainland Workers
Any standard UAE gratuity calculator provides accurate results. The Dubai Development Authority offers official government calculations.
Abu Dhabi Mainland Workers
Standard UAE Labour Law calculators work perfectly. Government portals provide authoritative calculation methods.
Free Zone Employees
DIFC workers need DEWS-specific tools. Other free zones like JAFZA, Masdar City, and KIZAD follow standard UAE calculations.
Accuracy Verification Steps
Follow these steps for precise calculations:
- Confirm exact basic salary amount
- Calculate continuous service days excluding unpaid leave
How Do You Verify Calculator Results?
Compare multiple calculator results and check against employment contract terms. Significant differences indicate calculation errors or special contract provisions.
Documentation Requirements
Keep these employment records for verification:
- Original employment contract
- Salary certificates and pay slips
Professional Consultation
Contact labour law experts for complex situations or disputed calculations.
To understand specific calculation requirements, contact us for personalized guidance.
Final Thoughts
Dubai and Abu Dhabi apply identical gratuity calculations under UAE Labour Law. The main differences exist in specialized free zones like DIFC, which uses monthly contribution systems instead of traditional lump-sum payments.
Standard UAE gratuity calculators work accurately for both emirates’ mainland employees. Free zone workers should verify if special rules apply to their employment.
Use our gratuity calculator for quick estimates based on current UAE Labour Law. Professional consultation helps resolve complex calculation scenarios and contract disputes.
