GulfPayCalcUAE & Gulf Labour Tools
menu

Basic Salary vs Total Salary: Which One Counts for UAE Gratuity?

Updated

calculateTry the End of Service Gratuity calculatorarrow_forward

Many people in the UAE expect their gratuity to be based on the full salary they see on their payslip. It is not. The figure used is your basic salary, and that is often much lower than your total pay.

What counts

Article 51 of Federal Decree-Law No. 33 of 2021 says end of service gratuity is calculated on the basic wage, specifically the last basic wage you received. Basic salary is the fixed monthly amount in your employment contract before any allowances are added on top.

What does not count

  • Housing allowance
  • Transport allowance
  • Phone, food or utility allowances
  • Bonuses and commission
  • Overtime pay
  • Other allowances and benefits in kind

An example of the difference

Take someone earning AED 10,000 a month in total, made up of AED 5,000 basic, AED 3,000 housing and AED 2,000 transport. After 5 years:

Based on Daily rate Days Gratuity
Basic salary (AED 5,000) 166.67 105 AED 17,500
Total salary (AED 10,000) 333.33 105 AED 35,000

The second row is what many people expect, but it is not the amount the formula produces. The same package with a lower basic salary means a lower gratuity.

How to find your basic salary

  1. Look at your employment contract or job offer, which should list basic salary and allowances separately.
  2. Check a payslip that breaks the salary into its components.
  3. Ask HR to confirm the basic salary registered for you.

If your contract only states one total figure, ask HR how it is split, since the split decides your gratuity.

Why the split matters

Because gratuity, and some other entitlements, use basic salary, the way a package is divided affects you directly. When comparing job offers, look at the basic salary as well as the total.

Calculate yours

Enter your basic salary and dates in the UAE gratuity calculator. For the steps behind it, read how UAE gratuity is calculated.

This is general information, not legal advice. Check your own contract and confirm your entitlement with MOHRE or a qualified adviser.

Official text: Federal Decree-Law No. 33 of 2021 · Cabinet Resolution No. 1 of 2022

Work out your own figure

Enter your dates and basic salary to see your estimate and how it is calculated.

Open the calculatorarrow_forward

This guide is general information, not legal advice. Check your own entitlement with MOHRE or a qualified adviser. See our Disclaimer.