Gratuity Calculator Jebel Ali Free Zone

This calculator works out the end-of-service gratuity for employees in the Jebel Ali Free Zone (JAFZA) based on the UAE Labour Law, using your basic salary, years of service, and type of resignation. Enter your details and it returns the total gratuity in UAE Dirhams, with a breakdown for the first 5 years and any additional years.

Formula

Gratuity = (Basic Salary ÷ 30) × Paid Days × Reduction Factor

• Basic Salary – your fixed monthly wage excluding allowances, housing, transport, or other perks (AED).
• Paid Days – 21 days for each of the first 5 years, then 30 days for each additional year, capped at 2 years’ total salary.
• Reduction Factor – 1.0 for employer termination; for employee resignation it is 1.0 if service ≥ 5 years, 2/3 if between 3 and 5 years, and 1/3 if less than 3 years.

The daily wage is always Basic Salary ÷ 30, regardless of how many days are in the month.

Worked Example

Using the default values: Basic Salary = 10,000 AED, Years = 5, Resignation = Employee resigns.

1. Daily wage = 10,000 ÷ 30 = 333.33 AED
2. Paid days = min(5,5)×21 + max(0,5-5)×30 = 105 + 0 = 105 days
3. Since years = 5, reduction factor = 1.0 (no reduction)
4. Gratuity = 333.33 × 105 = 35,000.00 AED

The calculator shows 35,000.00 AED, matching this manual calculation.

How JAFZA Gratuity Works

Jebel Ali Free Zone (JAFZA) is one of the UAE’s oldest and largest free zones, and its employment contracts generally follow the UAE Labour Law (Federal Decree-Law No. 33 of 2021). Gratuity is a statutory end-of-service benefit paid to expatriate workers when their contract ends. It is calculated on basic salary only – not on the full cost-to-company package. Many employees are surprised that housing, transport, and other allowances are excluded, so the actual gratuity is often lower than expected.

For employees who resign, the law applies a reduction based on length of service:

• Less than 1 year: no gratuity.
• 1 to 3 years: one-third (1/3) of the full entitlement.
• 3 to 5 years: two-thirds (2/3) of the full entitlement.
• 5 or more years: full entitlement.

If the employer terminates the contract without cause, the employee receives the full gratuity regardless of service length (provided they have completed at least 1 year).

How to Use This Calculator

Enter three values:

• Basic monthly salary (in AED) – check your contract or payslip; this is usually your base pay before allowances.
• Total years of service – count complete years, plus partial years are typically calculated proportionally, but this calculator assumes full years.
• Resignation type – select whether you resigned or were terminated by the employer.

The result shows the total gratuity, the number of paid days, and your daily wage. For partial years (e.g., 5 years and 7 months), you can enter a decimal like 5.58 to get a rough estimate, but note that many employers calculate partial months on a daily basis.

Common Mistakes and Misconceptions

• Including allowances: Gratuity is based only on basic salary. Including housing or transport inflates the estimate.
• Using 26 working days: Some people divide by 26, but the law uses 30 days for the daily wage.
• Ignoring the resignation reduction: Many employees resign before 5 years and expect full gratuity, but the law reduces it significantly.
• Forgetting the cap: Total gratuity cannot exceed two years’ basic salary. This calculator does not apply the cap automatically – if your result seems too high, check against the cap manually.
• Assuming JAFZA has different rules: JAFZA generally follows the UAE Labour Law, but some free zones have their own regulations. Always verify with your HR department or the JAFZA authority.

Limitations and When to Get Professional Advice

This calculator provides an estimate based on the standard formula. It does not account for:

• Partial years – the law specifies proportional calculation for months, but the exact method can vary.
• Contractual terms – some companies offer better gratuity terms in the employment contract.
• Unpaid leave or absences – these can reduce the service period.
• Special cases – such as termination for misconduct, which may forfeit gratuity.

For an exact figure, check your employment contract and consult your HR department or a legal professional. The UAE Ministry of Human Resources and Emiratisation (MOHRE) also provides an official gratuity calculator on its website.

Frequently Asked Questions

Is gratuity calculated on basic salary or total salary?

Only basic salary. Allowances like housing, transport, and phone are excluded. Your basic salary is usually specified in your contract and is typically the lowest component of your pay.

What if I have worked for 6 years and resign?

You get full gratuity because you have completed more than 5 years. For a basic salary of 10,000 AED, the calculation would be: (10,000/30) × (5×21 + 1×30) = 333.33 × 135 = 45,000 AED.

Does JAFZA have its own gratuity rules?

JAFZA generally follows the UAE Labour Law, but it is a free zone with its own regulatory framework. Some free zones have different rules, so always confirm with your HR or the JAFZA authority. In most cases, the calculation is the same as the mainland.

Can I get gratuity if I resign before completing 1 year?

No. Under UAE Labour Law, you must complete at least 1 year of continuous service to be eligible for gratuity. If you resign before 1 year, you receive nothing.

Is there a cap on gratuity?

Yes, the total gratuity cannot exceed two years’ basic salary. For example, if your basic salary is 20,000 AED, the maximum gratuity is 480,000 AED (24 months × 20,000).

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in basic | Basic monthly salary | AED | 10000 | 0 | 1000000
in years | Total years of service | years | 5 | 0 | 50
sel resign | Resignation type | Employee resigns=1, Employer terminates=0
out gratuity | Total gratuity | AED | (basic/30) * (min(years,5) * 21 + max(0,years-5) * 30) * (1 - 0.333 * resign * (years < 3)) | 2
out days | Paid days | days | min(years,5) * 21 + max(0,years-5) * 30 | 1
out daily | Daily wage | AED | basic / 30 | 2