Gratuity calculator UAE to be discuss in today’s guide, according to reports only seventy percent of employees
are getting gratuity in UAE and it may be because of less info about UAE Gratuity law. Yalla habibi let’s learn how to calculate gratuity in UAE.
are getting gratuity in UAE and it may be because of less info about UAE Gratuity law. Yalla habibi let’s learn how to calculate gratuity in UAE.
First you should know how gratuity calculator works and what UAE Law say about the end of service calculator UAE.
Important point before calculation is to
know your contract type, if it is limited term contract or unlimited term
contract, because end of service benefits depends up to your contract type and
is based on the reason for end of service either it is Resignation or
Termination?
know your contract type, if it is limited term contract or unlimited term
contract, because end of service benefits depends up to your contract type and
is based on the reason for end of service either it is Resignation or
Termination?
Resignation means if employee (worker) quit or
leave job before completing his/her contract while Termination means where
company (employer) terminate (cancel) an Employee.
Gratuity will always be
calculating by basic salary of worker.
leave job before completing his/her contract while Termination means where
company (employer) terminate (cancel) an Employee.
Gratuity will always be
calculating by basic salary of worker.
How to Calculate Gratuity in UAE for Limited Contracts:
No Gratuity
without Completing Limited Contract:
without Completing Limited Contract:
It is clearly mentioned in UAE LABOUR Law Article 138 that if employee has not completed
his/her limited contract period as signed in agreement, he/she will not be
eligible for any gratuity.
his/her limited contract period as signed in agreement, he/she will not be
eligible for any gratuity.
In simple words, if someone signed a limited term
contract which mostly is for 2 years or maximum 3 years but resigned after 6
months, 12 months, 14 months or without completing the contract, company will
do not pay any gratuity to that worker.
contract which mostly is for 2 years or maximum 3 years but resigned after 6
months, 12 months, 14 months or without completing the contract, company will
do not pay any gratuity to that worker.
Gratuity
for 1-5 Years of Service:
for 1-5 Years of Service:
If you have completed your limited contract and
it is within 1 to 5 years, you are entitled for 21 day’s basic salary wage for
every single year of work.
it is within 1 to 5 years, you are entitled for 21 day’s basic salary wage for
every single year of work.
Gratuity
for 5 Years of Service:
for 5 Years of Service:
If you have completed 5 years of continuous
service with your company and have resigned, then for the first 5 years of work
you are eligible for 21 days’ basic wage & for the service above 5 years,
you will get paid 30 day’s basic wage for each year of service.
service with your company and have resigned, then for the first 5 years of work
you are eligible for 21 days’ basic wage & for the service above 5 years,
you will get paid 30 day’s basic wage for each year of service.
What if
Company Terminates the Employee under Limited Contract?
Company Terminates the Employee under Limited Contract?
In case you have been terminated by your Company
and you have not completed your 1 year yet, you will not eligible for any
gratuity, but if you worked with the company for more than 1 year and less than
3 years, you will get 30 days of basic salary for No. of years your served
before termination.
and you have not completed your 1 year yet, you will not eligible for any
gratuity, but if you worked with the company for more than 1 year and less than
3 years, you will get 30 days of basic salary for No. of years your served
before termination.
How to Calculate Gratuity for Unlimited Contracts:
No Gratuity
for less than one year of service:
for less than one year of service:
Please keep in mind that gratuity is only
applicable when an employee completes 1 year of service with a company, so as
per UAE LABOR Law Article 132, Section 2, if worker resigns with less than a
year of service, he/she will not get any gratuity.
applicable when an employee completes 1 year of service with a company, so as
per UAE LABOR Law Article 132, Section 2, if worker resigns with less than a
year of service, he/she will not get any gratuity.
Link: Check Fine on Your Name
Gratuity
for more than 1 & Less than 3 Years of Service:
for more than 1 & Less than 3 Years of Service:
If worker resigns and he/she worked between 1-3
Years, he/she should take 1/3rd of 21 days of basic salary for each year of
employment.
Years, he/she should take 1/3rd of 21 days of basic salary for each year of
employment.
Gratuity
for more than 3 & Less than 5 Years of Service:
for more than 3 & Less than 5 Years of Service:
If worker resigns and he/she worked for more than
3 years but less than 5 years, he/she should take 2/3rd of 21 days for each
year of work.
3 years but less than 5 years, he/she should take 2/3rd of 21 days for each
year of work.
Gratuity calculation
for more than 5 Years of Service:
for more than 5 Years of Service:
If worker is resigning under unlimited contract
after 5 years of continued service, the worker should take 21 days basic salary
for every year he/she worked and the 30 days basic salary for additional years
after completing 5 years.
after 5 years of continued service, the worker should take 21 days basic salary
for every year he/she worked and the 30 days basic salary for additional years
after completing 5 years.
What if
Company Terminates the Employee?
Company Terminates the Employee?
In case of unlimited contract where the company
terminates the worker, 21 days of wages from minimum 1 and maximum 5 years
should be paid to Employee, if employee worked for more than 5 years, he/she
will be eligible for 30 Days of Basic wage for each year of his/her service.
terminates the worker, 21 days of wages from minimum 1 and maximum 5 years
should be paid to Employee, if employee worked for more than 5 years, he/she
will be eligible for 30 Days of Basic wage for each year of his/her service.
Online Gratuity Calculator:
Many asked us about how our gratuity calculated in UAE by the company, the answer is, please follow below mohre gratuity calculator formula and links as per your contract types.
Gratuity Calculator Dubai Formula:
UAE Gratuity Calculation Formula 1:
Basic Salary ÷ 30 (days
in Month) x 21 (basic salary days) x 2 (years of service)
in Month) x 21 (basic salary days) x 2 (years of service)
Example: 3000 ÷ 30 x 21 x 2 = 4200
How it Works?
3000 ÷ 30 = 100 your
daily Wage is 100 AED
daily Wage is 100 AED
100 x 21 = 2100 so,
your 21 days of basic wage is 2100.
your 21 days of basic wage is 2100.
Now Multiply your basic
wage with the No. of years you work : 2100 x 2 = 4200
wage with the No. of years you work : 2100 x 2 = 4200
UAE Gratuity Calculator 2025 Formula 2:
Basic Salary x 21 days
x No. of years of service / 30
x No. of years of service / 30
Example: 3000 x 21 x 2
/30 = 4200 AED
/30 = 4200 AED
If there is any dispute between worker and
company for gratuity payment or amount payable to the company, such case should
be put to the Ministry of Labour office (MOHRE/free zone) for investigation.
company for gratuity payment or amount payable to the company, such case should
be put to the Ministry of Labour office (MOHRE/free zone) for investigation.
FAQs of Computation for Gratuity in UAE:
Q: Can
company deduct any payment from the gratuity payable to the worker?
company deduct any payment from the gratuity payable to the worker?
Yes, the company (employer) may deduct any amount
due and payable to the employee (worker) to the employer (company) from his/her
gratuity payment and pay for the balance to the employee.
due and payable to the employee (worker) to the employer (company) from his/her
gratuity payment and pay for the balance to the employee.
Q: Shall an
employee be entitled to gratuity if he/she died?
employee be entitled to gratuity if he/she died?
Yes, in the event of a worker’s death, the
employer (company) must pay the end-of-service gratuity to employee
beneficiaries (heirs).
employer (company) must pay the end-of-service gratuity to employee
beneficiaries (heirs).
Q: What is
the maximum Gratuity that we can get?
the maximum Gratuity that we can get?
As per UAE LABOUR LAW, Article 132, maximum
gratuity amount for employee cannot exceed 2 years’ gross salary.
gratuity amount for employee cannot exceed 2 years’ gross salary.
Q: What is
the worker entitled to at the termination of his/her contract?
the worker entitled to at the termination of his/her contract?
The worker (employee) at the termination of
his/her employment contract will be entitled for to the following:
his/her employment contract will be entitled for to the following:
1: A notice period, or any amount due in lieu of
the notice period, only in case of unlimited contract.
the notice period, only in case of unlimited contract.
2: Compensation (payment/reward) for the
unreasonable dismissal if the contract was terminated by the company (employer)
for unreasonable cause, only in-case of unlimited contract.
unreasonable dismissal if the contract was terminated by the company (employer)
for unreasonable cause, only in-case of unlimited contract.
3: If employee is working under limited contract,
compensation equivalent to the period until the end of the contract, or three
month’s salary whichever is greater.
compensation equivalent to the period until the end of the contract, or three
month’s salary whichever is greater.
4: Payments equivalent to the balance of
un-utilized leave or any part thereof.
un-utilized leave or any part thereof.
5: Payments for overtime or any other pending
balance or salary.
balance or salary.
6: End of service benefits, gratuity.
Q: Can I
get 3-month salary in case of termination?
get 3-month salary in case of termination?
Yes, if you are terminated for reason other than
mentioned in UAE LABOR LAW Article 120, you are eligible for 3 month’s
compensations.
mentioned in UAE LABOR LAW Article 120, you are eligible for 3 month’s
compensations.
Q: Will
absence be calculated in Gratuity?
absence be calculated in Gratuity?
The day of absence from work without pay shall
not be included in calculating the time period of service. However, if the
employee (worker) completed 1 year in service he/she will be entitled to a
gratuity for the fraction of the year proportional for the part of the year he
spent in company if he has completed 1 year in continuous service.
not be included in calculating the time period of service. However, if the
employee (worker) completed 1 year in service he/she will be entitled to a
gratuity for the fraction of the year proportional for the part of the year he
spent in company if he has completed 1 year in continuous service.
What is Voluntary End of Service Benefits Scheme:
A voluntary scheme through which end-of-service benefits of employees are invested in
well-proven investment funds with good record. The scheme aims to provide
investment returns to employees on their end-of-service benefits.
well-proven investment funds with good record. The scheme aims to provide
investment returns to employees on their end-of-service benefits.
To know more about saving scheme click below link. https://www.mohre.gov.ae/assets/f66ecbb7/savings-scheme-document-en.aspx
The guide gratuity calculator UAE ends
here, hope you’ve now learned how to calculate gratuity in UAE? if not and still have question about gratuity calculator Dubai, feel free to ask your questions in below comment box.
here, hope you’ve now learned how to calculate gratuity in UAE? if not and still have question about gratuity calculator Dubai, feel free to ask your questions in below comment box.