UAE Gratuity Calculator

Why Use Our Gratuity Calculator

How Does the UAE Gratuity Calculator Work?

Calculating gratuity pay by hand can be tricky and might lead to mistakes. An online gratuity calculator is a free tool for easy UAE gratuity calculation. It gives an estimate by asking for your details like your salary, service years, contract type (limited or unlimited contract), and how you left your job. This tool makes UAE gratuity calculation simple with a few clicks.

Key Steps for Calculating End-of-Service Benefits

Article 51 of the UAE Labour Law states that gratuity is a benefit for expatriate employees in the private sector. To get an estimate with the online calculator, you need to know some details about yourself. This includes your basic salary, the length of your service, and your contract type.

Complete Minimum Service Period

You must work for at least one year to get gratuity pay. If you don’t meet this requirement, you won’t get the payment in the private or public sector.

Know Your Basic Salary

Your basic salary is the base for calculating gratuity. Make sure to enter your exact salary to get an accurate gratuity estimate.

Enter the Contract Type

Choose whether you had a limited or unlimited contract. This depends on the type of contract you had with your employer.

Select the Way by Which You Left Your Job

Choose how you left your job. This affects how your gratuity is calculated. It’s important to be accurate here.

Add the Start and End Date of Your Service

Enter the start and end dates of your job to get a precise gratuity estimate.

Gratuity Calculation Formula for Limited Contract

In limited contracts, you agree to work for a set number of years. If you don’t complete this, you might lose your rights, including gratuity.

Service Years: 1 to 5 years Gratuity = (Basic salary x 21 days x service years)/30

Service Years: More than 5 years Gratuity = (Basic salary x 30 days x service years)/30

Gratuity Calculation Formula for Unlimited Contracts

With an unlimited contract, you don’t agree to a specific number of years. You can leave with one to three months’ notice. You’re entitled to gratuity if you resign or get terminated.

Resignation

Here are the rules for end-of-service benefits for those who resign from unlimited contracts:

• Resigning before 1 year means no gratuity from the employer or hiring company.
• Resigning after 1-3 years means 1/3 of 21 days basic salary for each year as gratuity.
• Resigning after 3-5 years means 2/3 of 21 days basic salary for each year as gratuity.
• Resigning after 5 years means 21 days of basic salary for the first 5 years and 30 days for each year after.

Termination

Here are the new rules for termination:

• Terminated before 1 year, no gratuity entitlements.
• Terminated after 1 but less than 5 years, 21 days of basic pay for each year as gratuity.
• Terminated after 5 years, 21 days of basic pay for the first 5 years and 30 days for each year after.

Understanding UAE Labor Law Requirements

The Ministry of Human Resources and Emiratisation (MOHRE) oversees all end-of-service benefit calculations in the UAE. Federal Decree Law No. 33 of 2021 replaced the previous labor law and introduced clearer guidelines for gratuity calculations.

Two-Year Salary Cap

Under UAE law, the maximum gratuity payment cannot exceed two years’ worth of your basic salary. This cap applies to all employees regardless of their years of service.

Payment Timeline

Employers must pay end-of-service gratuity within 14 days of your contract termination. This is mandatory under the new labor law provisions.

Basic Salary Definition

Gratuity calculations are based solely on your basic salary and do not include allowances such as housing, transportation, or other benefits. Ensure your employment contract clearly defines your basic salary component.

Alternative End-of-Service Benefits Scheme

In 2023, the UAE introduced Cabinet Resolution No. 96 of 2023, which allows employers to participate in a voluntary savings scheme as an alternative to traditional lump-sum gratuity payments.

How the Savings Scheme Works

• Employers contribute monthly to authorized investment funds
• Contributions are 5.83% of basic salary for employees with less than 5 years of service
• Contributions increase to 8.33% for employees with more than 5 years of service
• The scheme provides better financial security and potential investment growth

Benefits for Employees

• Protection against employer bankruptcy
• Potential investment returns on contributions
• Guaranteed payment even if the company faces financial difficulties
• Supervised by MOHRE and Securities and Commodities Authority (SCA)

Can Gratuity be Denied?

Article 139 of the UAE Labour Law explains when an employee might not get gratuity. Here are the reasons:

• Resigning without proper notice, except for certain reasons, means no gratuity. This includes unlimited contracts and limited contracts before five years.
• Terminated for certain reasons or resigning to avoid dismissal might also mean no gratuity.
• Serious misconduct leading to dismissal may result in forfeiture of gratuity rights.

Secure Your Gratuity Benefits

To get your gratuity, make sure you meet the UAE Labour Law’s requirements. This includes at least one year of continuous service. Keep good records of your employment, like contracts and salary statements.

When you leave or are let go, ask your employer for your gratuity. If there’s a dispute, get help from authorities or a lawyer to get your benefits.

Steps to Claim Your Gratuity:

Familiarize Yourself with Your Employment Contract

Read your contract well before starting work in the UAE. Each job and contract has its own rules for end-of-service benefits.

Know Your Legal Rights in the Emirates

Learn about the UAE Labour Law and its rules on gratuity. This will help you understand when you’re eligible and when you’re not.

Keep Your Employment Record

Keep track of your employment history. This includes start and end dates, salary details, and contract terms. It will help you claim your gratuity when needed.

Discuss Concerns with Your Employer

Talk openly with your employer about gratuity concerns or questions. This ensures you both understand each other throughout your job.

Seek Legal Assistance

If you have disputes or questions about gratuity, get help from a labour law expert. This will protect your rights and help you get your benefits in the UAE.