Get an instant, policy-ready estimate without spreadsheets.
Country / Industry Variant
Localized for Saudi payroll and HR teams.
Always validate final payout against latest legal and contract terms.
Rules vary by country; use this as an estimate and validate against local law.
Many gratuity frameworks are calculated from basic salary.
Yes, you can enter fractional years.
Gratuity is one of the most important statutory payments an employee receives at the end of their career with a company. A reliable gratuity amount calculator removes ambiguity from the process — giving both employees and HR teams an accurate entitlement figure based on years of service, final salary, and the applicable labor law.
Gratuity is a lump-sum payment made by an employer to an employee as a reward for long and continuous service. It is a statutory benefit in many countries — including the UAE, Saudi Arabia, India, and several other Gulf and South Asian nations — and is typically triggered when an employee completes a minimum qualifying period, usually five years.
The calculation depends on three variables: the employee's last drawn basic salary, the total years of qualifying service, and the applicable formula defined by the relevant labor law. A service calculator helps determine the precise duration of qualifying service, which feeds directly into the gratuity formula.
First 5 years: 21 days of basic salary per year of service
Beyond 5 years: 30 days of basic salary per year of service
Example: AED 10,000 basic × (21/30) days × years = Gratuity Amount
First 5 years: Half month's salary per year
Beyond 5 years: One month's salary per year
Example: SAR 8,000 basic × 0.5 × 3 years = SAR 12,000 for first tranche
Formula: (Last Basic Salary ÷ 26) × 15 × Years of Service
Example: ₹30,000 ÷ 26 × 15 × 10 years = ₹1,73,077
Not every period of employment automatically counts toward gratuity-qualifying service. HR must verify the following when running a gratuity amount calculator:
| Country | Minimum Service | Basis | Cap |
|---|---|---|---|
| UAE | 1 year | Basic salary | No statutory cap |
| Saudi Arabia | 2 years (resignation) | Last wage | No statutory cap |
| India | 5 years | Basic + DA | ₹20 lakh |
| Kuwait | 1 year | Last salary | 1.5 years' salary |
| Bahrain | 1 year | Last basic salary | No statutory cap |
Yes — significantly. In Saudi Arabia, an employee who resigns before completing five years is entitled to only one-third of the calculated gratuity. Between five and ten years, they receive two-thirds. Only after ten years does a resigning employee receive full gratuity. In the UAE under the new labor law, gratuity entitlement is the same regardless of whether the employee resigned or was terminated, provided minimum service is met.
Enter the employee's basic salary, start date, and end date above for an accurate gratuity amount.
Basic salary for gratuity purposes excludes housing allowances, transport allowances, commissions, and other variable pay — unless the employment contract or local law explicitly states otherwise. Always check the contract definition to avoid disputes.
In the UAE and GCC countries, gratuity is generally not subject to income tax. In India, gratuity received from a government employer is fully exempt; from private employers it is exempt up to the statutory cap (currently ₹20 lakh). Always check current local tax rules before processing payment.
Labor law in most GCC countries requires gratuity to be paid as a lump sum at the time of final settlement. Installment arrangements may be permissible by mutual written agreement but can expose the employer to legal risk if challenged by the employee.
A service calculator computes the precise number of complete years and remaining months between the hire date and the last working day. This is essential for gratuity, because the calculation differs for the first five years versus subsequent years — a few days' difference can change which slab applies.
Disclaimer: This calculator is for informational purposes only and does not constitute legal or financial advice. We do not guarantee the accuracy or completeness of the results. Please consult a qualified professional for advice specific to your situation.