No - the UAE has no personal income tax, so gratuity (end-of-service benefit) payments are not subject to income tax deduction. Gratuity is calculated based on basic salary and years of service under current labour law, with no reduction for resigning before five years since the 2021 reform removed that old rule. The full calculated amount is what an employee receives, without a tax deduction reducing it.
Check your own exact figures with the Salary & Gratuity Calculator - free, in under a minute, no sign-up required.
Frequently Asked Questions
Does this mean gratuity has no deductions at all?
Tax specifically doesn't apply, though certain contractual deductions (like unpaid absences) may apply depending on your specific circumstances.
Is gratuity calculated on basic or full salary?
Basic salary only - not the full package including housing or transport allowances.
Does the tax-free status apply to all types of termination or resignation?
Since the 2021 reform, gratuity calculation is consistent regardless of resignation versus termination, subject to minimum service requirements, and remains tax-free either way.
Is any other form of UAE employment income taxed?
The UAE has no personal income tax on salary, gratuity or most other individual employment income.
How can I calculate my exact gratuity amount?
Use the salary and gratuity calculator with your basic salary and years of service.