UAE Severance Pay Calculator 2025
Calculate end-of-service benefits and severance costs accurately according to UAE Labor Law. Free calculator for HR professionals, hiring managers, and employees in the UAE.
Calculate UAE Severance Pay in Seconds
Our free UAE severance calculator helps you accurately estimate end-of-service gratuity based on current UAE Labor Law requirements. Whether you're calculating for limited or unlimited contracts, get instant, compliant results.
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100% compliant with UAE Labor Law No. 8 of 1980
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Supports both limited and unlimited employment contracts
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Handles resignation, termination, and mutual agreement scenarios
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Instant, accurate severance pay calculations
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Free to use for all HR professionals in UAE
Why Choose Our UAE Severance Pay Calculator
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UAE Labor Law Compliance
Stay 100% compliant with UAE Federal Law No. 33 of 2021 and avoid costly legal disputes with our accurate severance pay calculations.
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HR Budget Planning
Plan your human resources budget effectively by calculating exact severance costs before making hiring or employee termination decisions.
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Instant Accurate Results
Get immediate, precise end-of-service benefit calculations without complex spreadsheets or manual calculations prone to errors.
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UAE Employment Analytics
Make data-driven workforce decisions and understand the true cost of employee turnover in the UAE market.
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Completely Free Tool
Access our professional-grade UAE severance calculator at no cost. No hidden fees, subscriptions, or premium upgrades required.
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Multi-Contract Support
Handle both limited and unlimited employment contracts with specialized calculations for each contract type under UAE law.
UAE End of Service Benefits: Complete Reference Guide 2025
UAE Severance Pay Rates by Years of Service
Years of Service in UAE
Severance Pay Rate
Example (AED 5,000 monthly salary)
First 1-5 years
21 days salary per year
AED 3,500 per year of service
First 1-5 years
21 days salary per year
AED 3,500 per year of service
Limited vs Unlimited Contract Severance in UAE
UAE Unlimited Contract Severance
- Employee Resignation: Severance pay after 3+ years service
- Employer Termination: Full severance after 1+ year
- Calculation: 21 days (first 5 years), 30 days thereafter
UAE Limited Contract Severance
- Employee Resignation: No severance pay entitlement
- Employer Termination: Full severance after 1+ year
- Calculation: End of service benefits after 1+ year
How to Calculate UAE Severance Pay: 5-Step Guide
1
Check UAE Employment Contract Type
Determine if the employee has a limited-term or unlimited employment contract in UAE, as this significantly affects severance pay eligibility and calculation.
2
Calculate Total Years of Service in UAE
Count complete years and months of continuous service from employment start date to termination date in the UAE.
3
Identify Employment Termination Reason
Determine the specific reason: employee resignation, employer termination without cause, mutual agreement, or contract completion.
4
Apply UAE Severance Pay Formula
Use the UAE labor law formula: 21 days' basic salary per year for first 5 years, then 30 days' salary for each additional year.
5
Calculate Final UAE Severance Amount
Multiply the employee's basic monthly salary by calculated days, divided by 30 to determine the total end-of-service gratuity amount. For more complex calculations, consider using our UAE gratuity calculator.
UAE Severance Pay FAQ: Most Asked Questions 2025
How is end of service gratuity calculated in UAE?
UAE end of service gratuity is calculated using basic salary: 21 days' pay for each of the first 5 years of service, then 30 days' pay for each additional year. The calculation method varies based on contract type (limited vs unlimited) and termination reason (resignation vs employer termination).
What is the difference between limited and unlimited contract severance in UAE?
For unlimited contracts in UAE: employees get severance after 3+ years if they resign, or after 1+ year if terminated by employer. Limited contracts provide end of service benefits only upon employer termination or contract completion - not for employee resignation.
When do employees qualify for end of service benefits in UAE?
Employees in UAE qualify for end of service benefits after completing minimum one year of continuous employment. The exact amount depends on employment contract type, total years of service, and specific reason for employment termination under UAE labor law.
How much is severance pay for 5 years employment in UAE?
For 5 years of employment in UAE, an employee receives 21 days' basic salary × 5 years = 105 days of salary (approximately 3.5 months' pay) if terminated by employer or upon completion of limited contract term.
What salary components are included in UAE severance calculation?
UAE severance pay calculations are based exclusively on basic salary component only. Housing allowances, transportation allowances, bonuses, overtime payments, and other benefits are typically not included in end of service gratuity calculations under UAE labor law.
Can UAE employers avoid paying severance to employees?
UAE employers cannot legally avoid paying required severance except in cases of employee termination for serious misconduct or disciplinary reasons. All other employment terminations require proper end of service benefit payments according to UAE Federal Labor Law requirements.
