Gratuity Calculator UAE , End of Service Calculation in Dubai

By Avatar of iiQ8 Jobs, News December 23, 2022
Q8 News 202 total views, 0 today

Gratuity Calculator UAE , End of Service Calculation in Dubai

Limited Contract – Gratuity Pay Calculator UAE

Duration of Service

Less than 1 year of service
If you leave work before you complete one year of service, you are not entitled to any gratuity pay or
final settlement.

1 year – 5 years of service

The employee will receive full gratuity based on 21 days of salary

5 or more years of service
Employees are entitled with full gratuity pay based on 30 days salary for every year of work.

Example:

Basic Salary AED 10,000

Identify your daily wage = 10,000 ÷ 30 = 333.30. Your daily wage is AED 333.30

Multiply daily wage by 21 or 30 (depending on duration of service in the company) = 333.30 x 21 = 6,999.30. So 21-days salary is AED 6,999.30 will be received for every year of service.

For those who have rendered more than 5 years of service, gratuity entitlement for each year of service is acceptable as long as the total figure does not exceed two years total salary figure.

Unlimited Contract – Gratuity Pay Calculator UAE

Duration of Service

Less than 1 year of service

Not entitled to any gratuity pay.

1 year – 3 years of service

Employee is entitled to one third (1/3) of the 21-days gratuity pay.

3 years – 5 years of service
Employee is entitled to two thirds (2/3) of the 21-days gratuity pay.

5 or more years of service
Employee is entitled to full 21-days gratuity pay.

Example:
Basic salary example: AED 10,000

Identify your daily wage = 10,000 ÷ 30 = 333.30. Your daily wage is AED 333.30

Multiply it by 21 = AED 333.30 x 21 = 6,999.30.
So, 21 days salary is AED 6,999.30
Get the 1/3 of this figure (1-3 years); 2/3 of the figure (3-5 years) to get the total gratuity pay.
For those who have worked 5 years or more, the full AED 6,999.30 is payable for each year if you have completed 5 years or more.

 

For more details you can visit Ministry of Human Resources & Emiratisation https://www.mohre.gov.ae/en/home.aspx




GRATUITY CALCULATOR

 As per UAE Labour Law, employees working in UAE are entitled to be paid by employer gratuity pay at the end of employment provided one year of service has been completed. No gratuity will be paid if employee resigns or gets terminated before one year of employment.

IMPORTANT FACTORS FOR CALCULATING GRATUITY:

  1. Type of contract
In UAE, there are mainly two types of employment contract i.e. limited or unlimited. Rules about calculating gratuity under both type of contracts are different and are discussed below in details.

 

  1. Last basic salary
The last basic salary to be used as a basis for calculating gratuity but any other bonus and allowances such as housing, conveyance, overtime, children education etc. are not to be included in the gratuity Calculations.

 

  1. Duration of employment
At least one year of employment should have been completed to be entitled for gratuity.
Please also note Gratuity computation should be based on continuous employment. In other words, if the employee has been absent from work without pay during his/her period of service, that period should not be considered in calculating gratuity. However, please note that above gratuity calculator assumes that there is continuous service between the first and last working day. Therefore, in cases where employment is not continuous, the calculations done by gratuity calculator will need to be adjusted accordingly.

HOW GRATUITY CALCULATOR WORKS

There are two types of employment contracts in UAE i.e. Limited contract and Unlimited contract. The rule for calculation gratuity under both these types of contracts are explained below:

Calculating Gratuity For Unlimited Contract

Resignation

An employee who has unlimited contract and resigns from his employment then the following rule shall apply for calculating gratuity:
  • resignation before 1 year of service, not entitled to any gratuity.
  • resignation between 1 and 3 years of service, employee is entitled to one third of 21 days’ basic salary for each year as gratuity for the period of employment.
  • resignation between 3 and 5 years of service, employee is entitled to two-thirds of 21 days’ basic salary for each year as gratuity for the period of employment.
  • resignation after 5 years of service, employee is entitled to 21 days’ basic salary for first 5 years  of employment and 30 days’ basic salary for each additional years.

 

Termination

An employee who has unlimited contract and his/her employment is terminated by the employer then the following rule shall apply for calculating gratuity:

 

  • termination before 1 year of service, employee is not entitled to any gratuity.
  • termination between more than 1 year but less than 5 years of service, gratuity calculation to be done as 21 days’ basic salary for each year of service.
  • termination after more than 5 years of service, gratuity calculation to be done as 30 days’ basic salary for each year of service after first 5 years and 21 days’ basic salary for the first five years.
  • Total gratuity should not exceed two-year basic salary.

 

Calculating Gratuity For Limited Contract

An employee who has limited contract, then the following rule shall apply for calculating gratuity:
  • Period of employment less than 1 year, employee is not entitled to any gratuity.
  • Period of employment between 1 year to 5 years, employee is entitled to gratuity based on 21 days’ salary for each year of work.
  • Period of service more than 5 years, employee is entitled to gratuity of 30 days’ salary for each year of work after first 5 years plus 21 days’ basic salary for each year for first 5 years.
  • Total gratuity should not exceed two-year of basic salary.

Above gratuity calculator assumes that employee has completed his limited term employment contract.

Spread iiQ8

December 23, 2022 4:01 PM

202 total views, 0 today