GulfDues / Guides / How to calculate EOSB

How to calculate EOSB in the UAE, step by step

Take your payslip and your joining date. In five steps you get the same number the law gives - and you can check what your employer offers.

What EOSB is

EOSB means end-of-service benefit - in the UAE it is usually called gratuity. Under Article 51 of the UAE Labour Law (Federal Decree-Law No. 33 of 2021), a full-time employee in the private sector who has worked at least one year without a break gets it when the job ends. Resigning does not reduce it.

If you only want the number, the UAE gratuity calculator does all five steps for you. If you want to know how it is worked out, or to check your employer's figure, follow the steps below.

  1. 1Find your basic salary
  2. 2Count your days of service
  3. 3Work out your daily wage
  4. 4Multiply by 21 or 30 days a year
  5. 5Check the 2-year limit

Step 1: find your basic salary

Look at your payslip or your contract. EOSB uses basic salary only - not housing, transport or other allowances, and not overtime. Use the basic salary of your last month.

Many workers get a big total salary but a small basic. EOSB follows the basic - this is the most common reason the figure is lower than people expect.

Step 2: count your days of service

Count from your joining day to your last working day. Then take away days of unpaid leave or absence - they do not count as service. Divide the days by 365 to get your years of service.

  • Less than 1 year: no EOSB.
  • Part of a year counts - 3 years and 6 months is 3.5 years.

Step 3: work out your daily wage

Daily wage = basic salary ÷ 30.

Basic salary (AED)Daily wage (AED)
3,000100.00
4,000133.33
5,000166.67
6,000200.00
9,000300.00

Step 4: multiply by 21 or 30 days a year

  • For each of the first 5 years: 21 days of wage.
  • For every year after 5: 30 days of wage.

So one year of service is worth 21 days (70% of a month's basic) in the first five years, and 30 days (a full month's basic) after that.

EOSB on a basic of AED 5,000
1 yearAED 3,5003 yearsAED 10,5005 yearsAED 17,5006 yearsAED 22,5008 yearsAED 32,50010 yearsAED 42,500

Step 5: check the 2-year limit

The total can never be more than 2 years of basic salary (24 × basic). Most people never reach it - it matters only after many years of service.

Three worked examples

Example 1 - 3 years and 6 months, basic AED 4,000

  • Daily wage: 4,000 ÷ 30 = AED 133.33
  • 21 days × 133.33 = AED 2,800 a year
  • 2,800 × 3.5 years = AED 9,800

Example 2 - 8 years, basic AED 6,000

  • Daily wage: 6,000 ÷ 30 = AED 200
  • First 5 years: 21 × 200 × 5 = AED 21,000
  • Next 3 years: 30 × 200 × 3 = AED 18,000
  • Total: AED 39,000

Example 3 - 30 years, basic AED 5,000 (the limit)

  • Daily wage: AED 166.67
  • First 5 years: 21 × 166.67 × 5 = AED 17,500
  • Next 25 years: 30 × 166.67 × 25 = AED 125,000
  • Together AED 142,500 - but the limit is 2 years of basic: 24 × 5,000 = AED 120,000
ExampleBasic (AED)ServiceEOSB (AED)
14,0003.5 years9,800
26,0008 years39,000
35,00030 years120,000 (limit)

Work out your own EOSB in seconds →

Mistakes people make

  1. Using total salary instead of basic.
  2. Forgetting unpaid leave - those days come off the service.
  3. Thinking resignation cuts it - under the 2021 law it does not.
  4. Forgetting the rest of the final settlement - unused leave and unpaid salary are paid too. See the UAE final settlement calculator.

For the rule explained with a table for 1 to 10 years, read UAE gratuity calculation explained.

This is an estimate under the published law, not legal advice. Your employer or MOHRE gives the final figure.

Sources