EOSB Calculator UAE 2025 - Calculate Your End of Service Benefits
What is EOSB in UAE?
End of Service Benefits (EOSB), commonly referred to as gratuity, is a mandatory payment that employers in the UAE must provide to employees upon termination of their employment contract. This legal requirement applies to all expatriate employees working in the private sector who have completed at least one year of continuous service with their employer. The EOSB serves as financial recognition for an employee's dedication and contribution during their tenure with the organization.
The calculation of EOSB in UAE is governed by specific provisions outlined in the UAE Labour Law, and the amount depends primarily on two factors: the employee's basic salary (excluding allowances) and their total years of service. Understanding how EOSB is calculated is crucial for both employees planning their financial future and employers managing their workforce obligations.
EOSB Calculator UAE - Free Online Tool
EOSB Calculation Formula UAE
The EOSB calculation formula in UAE follows a structured approach based on the employee's length of service. The calculation uses the employee's last drawn basic salary and applies different rates for different service periods. Understanding this formula is essential for accurately estimating your end of service gratuity.
For Limited Contracts (Standard Formula)
Daily Wage Calculation:
\[ \text{Daily Wage} = \frac{\text{Monthly Basic Salary}}{30} \]
For 1 to 5 Years of Service:
\[ \text{EOSB} = \left(\frac{\text{Basic Salary}}{30}\right) \times 21 \times \text{Years of Service} \]
For More Than 5 Years of Service:
\[ \text{EOSB} = \left[\left(\frac{\text{Basic Salary}}{30}\right) \times 21 \times 5\right] + \left[\left(\frac{\text{Basic Salary}}{30}\right) \times 30 \times (\text{Years} - 5)\right] \]
Maximum Cap:
\[ \text{Maximum EOSB} = \text{Basic Salary} \times 24 \text{ months} \]
The formula above indicates that employees receive 21 days' basic salary for each year of service during the first five years. After completing five years, they receive 30 days' basic salary for each additional year of service. However, the total EOSB amount cannot exceed the equivalent of two years' total salary (24 months).
For Unlimited Contracts (Legacy Calculation)
While unlimited contracts are being phased out in the UAE as of 2023, some employees may still have legacy unlimited contracts. For these contracts, the calculation differs based on the reason for termination:
| Years of Service | Employer Termination | Employee Resignation |
|---|---|---|
| Less than 1 year | No gratuity | No gratuity |
| 1 to 3 years | Full entitlement (21 days/year) | 1/3 of entitlement |
| 3 to 5 years | Full entitlement (21 days/year) | 2/3 of entitlement |
| More than 5 years | Full entitlement (21+30 days) | Full entitlement |
Note: As per UAE government regulations effective from December 2023, all unlimited contracts must be converted to limited (fixed-term) contracts.
EOSB Calculation Examples
Example 1: Employee with 4 Years of Service
Given:
- Monthly Basic Salary: AED 10,000
- Years of Service: 4 years
- Contract Type: Limited
Calculation:
\[ \text{Daily Wage} = \frac{10{,}000}{30} = 333.33 \text{ AED} \]
\[ \text{EOSB} = 333.33 \times 21 \times 4 = 28{,}000 \text{ AED} \]
Result: The employee is entitled to AED 28,000 as end of service benefits.
Example 2: Employee with 7 Years of Service
Given:
- Monthly Basic Salary: AED 12,000
- Years of Service: 7 years
- Contract Type: Limited
Calculation:
\[ \text{Daily Wage} = \frac{12{,}000}{30} = 400 \text{ AED} \]
\[ \text{EOSB for first 5 years} = 400 \times 21 \times 5 = 42{,}000 \text{ AED} \]
\[ \text{EOSB for remaining 2 years} = 400 \times 30 \times 2 = 24{,}000 \text{ AED} \]
\[ \text{Total EOSB} = 42{,}000 + 24{,}000 = 66{,}000 \text{ AED} \]
Result: The employee is entitled to AED 66,000 as end of service benefits.
Example 3: Employee with 12 Years of Service
Given:
- Monthly Basic Salary: AED 8,000
- Years of Service: 12 years
- Contract Type: Limited
Calculation:
\[ \text{Daily Wage} = \frac{8{,}000}{30} = 266.67 \text{ AED} \]
\[ \text{EOSB for first 5 years} = 266.67 \times 21 \times 5 = 28{,}000 \text{ AED} \]
\[ \text{EOSB for remaining 7 years} = 266.67 \times 30 \times 7 = 56{,}000 \text{ AED} \]
\[ \text{Calculated Total} = 28{,}000 + 56{,}000 = 84{,}000 \text{ AED} \]
Checking Maximum Cap:
\[ \text{Maximum Allowed} = 8{,}000 \times 24 = 192{,}000 \text{ AED} \]
Result: Since AED 84,000 is less than the maximum cap, the employee receives AED 84,000 as end of service benefits.
Key Points About EOSB in UAE
Important considerations when calculating EOSB:
- Minimum Service Requirement: Employees must complete at least one full year of continuous service to be eligible for EOSB payment.
- Basic Salary Only: The EOSB calculation is based solely on the basic salary component. Housing allowances, transportation allowances, and other benefits are not included in the calculation.
- Pro-rata Calculation: If an employee works for a partial year, the EOSB is calculated proportionally. For example, 6 months equals 0.5 years.
- Maximum Limit: The total EOSB amount cannot exceed the equivalent of 24 months (2 years) of the employee's basic salary, regardless of years of service.
- Payment Timeline: Employers are legally required to pay the EOSB within 14 days from the employee's last working day.
- Unpaid Leave: Periods of unpaid leave are excluded when calculating the total service period for EOSB purposes.
- Part-Time Employees: For part-time employees, the EOSB is calculated based on a proportional ratio of their working hours compared to full-time hours.
- Contract Type Changes: With the transition from unlimited to limited contracts, all calculations now follow the standard limited contract formula.
EOSB Eligibility Criteria UAE
Not all employees are entitled to End of Service Benefits in the UAE. The eligibility is determined by several factors outlined in the UAE Labour Law. Understanding these criteria helps employees know their rights and employers fulfill their obligations correctly.
Primary eligibility requirements include:
- Employment Sector: EOSB primarily applies to expatriate employees working in the private sector. UAE nationals are typically covered under separate pension schemes, though recent voluntary programs allow them to opt into EOSB arrangements.
- Service Duration: The employee must have completed a minimum of one year of continuous service with the employer. Employment periods shorter than 12 months do not qualify for gratuity payments.
- Contract Status: Both limited (fixed-term) and unlimited contracts are eligible, though unlimited contracts are being phased out and converted to limited contracts as per current regulations.
- Termination Type: Under current law (Federal Decree-Law No. 33 of 2021), employees on limited contracts receive full EOSB entitlement regardless of whether they resign or are terminated, provided they meet the minimum service requirement.
- Misconduct Clause: Employees terminated for serious misconduct under Article 44 of the UAE Labour Law may forfeit their right to EOSB. The specific circumstances determine the outcome.
Frequently Asked Questions About EOSB UAE
Why Use RevisionTown's EOSB Calculator UAE?
Our EOSB Calculator UAE is designed to provide accurate, instant calculations based on the latest UAE Labour Law regulations. Whether you are an employee planning your career transition or an employer managing workforce finances, this tool offers several advantages:
- Accuracy: Calculations follow the exact formulas prescribed in Federal Decree-Law No. 33 of 2021, ensuring compliance with current UAE labour regulations.
- Instant Results: Get immediate calculations without manual computation or complex spreadsheet formulas.
- Detailed Breakdown: View step-by-step breakdowns showing how your EOSB is calculated, including separate amounts for different service periods.
- Contract Type Support: Calculate EOSB for both limited contracts (standard) and legacy unlimited contracts with different termination scenarios.
- Free to Use: Our calculator is completely free with no registration or hidden fees required.
- Mobile Friendly: Access the calculator from any device - desktop, tablet, or smartphone.
- Educational Resource: Beyond just calculations, this page provides comprehensive information about EOSB regulations, formulas, and examples to enhance your understanding.
Understanding your End of Service Benefits is crucial for financial planning, whether you're considering changing jobs, retiring, or relocating. Use our EOSB Calculator UAE tool to get a clear picture of your gratuity entitlement and make informed career decisions with confidence.