Is Gratuity Taxable in UAE?
TL;DR: UAE gratuity is 100% tax-free—no income tax, pension deductions, or withholdings. You receive the full calculated amount. However, your home country may tax it as foreign income. Keep payment proof and consult a tax professional in your home country if required.
Bottom Line for UAE
Gratuity is NOT taxed in UAE You receive 100% of amount owed Your home country may tax it (check local laws)
To better understand your entitlements and ensure you're receiving the correct amount, check out our comprehensive guide on how to calculate gratuity in UAE which breaks down the official MOHRE formula step-by-step.
What You Receive
If owed AED 10,000 gratuity:
- In UAE: You receive AED 10,000 (no tax)
- Home country: May owe tax on it (varies by country)
Tip for Expats
When moving abroad with gratuity:
- Keep proof of UAE gratuity payment (receipt, bank transfer)
- Declare to home country if required
- Consult home country tax professional
- UAE won't tax it—that's certain
Understanding when and how you'll receive your gratuity is crucial. Learn more about UAE Labour Law 2025 regulations to ensure you receive your full entitlement. If you're planning to leave your job, knowing the difference between resignation vs termination can significantly impact your final amount.
For an instant end-of-service estimate, use our gratuity calculator on the homepage.
Calculate Your Gratuity
Know how much you'll receive (100% of your calculated amount in UAE).
UAE: Tax-free gratuity! Check your home country though.
