Gratuity, leave and notice in one end-of-employment total.
Final settlement
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Gratuity
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Leave encashment
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Pay in lieu of notice
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Three cheques rolled into one leaving payment
When you leave a job in the UAE, your final settlement is rarely a single tidy number. It is three separate entitlements added together: your end-of-service gratuity, the cash value of any annual leave you accrued but never took, and any pay you are owed in lieu of notice. Each is calculated on a different basis, which is exactly why a settlement you work out in your head so often disagrees with the one HR produces. This tool combines all three the way the UAE Labour Law, administered by MOHRE, frames them, and because the UAE has no personal income tax, nothing is withheld from the total. The figure it shows is what should actually reach your account.
The detail that trips up almost everyone is that gratuity and leave use your basic salary, while notice pay uses your total salary. Miss that split and your estimate drifts, usually low on the gratuity and high or low on the notice depending on which figure you accidentally used.
Adding up a four-year exit
Run the defaults: a monthly basic of AED 12,000, a total monthly salary of AED 20,000, four years of service, 15 unused leave days, and 30 notice days owed. Gratuity for four years is 4 times 21 days of basic pay, which is 84 days at a daily basic of AED 400, giving AED 33,600. Leave is encashed at the daily basic, so 15 days at AED 400 is AED 6,000. Notice is paid at the daily total salary, AED 666.67, for 30 days, giving AED 20,000.
| Component | Basis | Amount |
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The chart shows the three blocks that build the AED 59,600 total and their relative size.
The notice floor and the resignation question
Two rules built into this calculator are worth understanding. First, notice pay is floored at the statutory minimum of 30 days. Even if you enter fewer notice days, the tool applies 30, because that is the minimum the law generally requires. If your contract specifies a longer notice period, enter the longer figure and it will use that instead. Second, under the current Labour Law that took effect in 2021, gratuity is no longer reduced because you resigned rather than being terminated. Older rules used to scale gratuity down for resignation under shorter service; that reduction no longer applies, so this tool pays the full gratuity regardless of who ended the contract. The day-counts, the 30-day month convention, and the notice floor reflect the current law as the calculator models it. Settlements can also involve deductions for things like outstanding loans or unreturned equipment, which this tool does not attempt, so treat the figure as the gross entitlement and confirm the specifics, and any current rule changes, with MOHRE.
Settlement questions
Why is my leave paid on basic salary but my notice on total salary?
It comes down to how each entitlement is defined. Gratuity and leave encashment in the UAE are anchored to basic salary, the figure with allowances stripped out, while pay in lieu of notice compensates you for the full salary you would have earned during the notice period, including allowances. The tool mirrors that distinction, which is the most common reason a self-calculated number and the official one diverge.
Does my employer withhold any tax from the settlement before paying it?
No. The UAE has no personal income tax, so there is no withholding on a final settlement. What can reduce the amount you receive are legitimate deductions such as an outstanding salary advance, a staff loan, or the cost of unreturned company property. Those are separate from tax, and this tool shows the gross figure before any such deductions.