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Are you an employee in the UAE wondering about your gratuity entitlements? You’re not alone. The UAE Labour Law governs the rights and obligations of both employees and employers, including end-of-service gratuity. In this article, we’ll explain how to calculate your gratuity using the latest UAE gratuity calculator.
What is End of Service Gratuity?
First, let’s define what end of service gratuity means. End-of-service gratuity is a lump sum payment made to employees who complete their tenure with an employer. The calculation for gratuity in the UAE depends on various factors, such as the type of contract, duration of employment, and last drawn basic salary.
How To Calculate Gratuity In UAE
The gratuity calculation in the UAE is based on the Article 132 of the UAE Labour Law. According to this article, an employee who completes one year of continuous service is entitled to receive a gratuity at the end of their employment. The gratuity amount is calculated as follows:
– 21 days’ basic salary for each year of service if the employee has worked for less than five years
– 30 days’ basic salary for each year of service if the employee has worked for five years or more
For example, if you have worked for six years with a basic salary of AED 10,000, your gratuity entitlement would be calculated as follows:
(5 years x 30 days) + (1 year x 21 days) = 165 days
Daily rate = Basic salary ÷ 30
Gratuity amount = Daily rate x Number of days
Gratuity amount = AED 10,000 ÷ 30 x 165 = AED 54,999
Related: How to Calculate Gratuity in Dubai
Gratuity Calculator in UAE
To make things easier for employees, the Ministry of Human Resources and Emiratisation has launched a gratuity calculator. This calculator helps employees to calculate their end-of-service gratuity entitlements based on the latest UAE labour law.
The gratuity calculator in UAE is available on the official website of the Ministry of Human Resources and Emiratisation. All you need to do is enter your basic salary, period of service, and type of contract (limited or unlimited). The calculator will do the rest for you.
How to Calculate Gratuity in UAE for Limited Contract
In limited contact, the employee is bound to do the services as per the contract if the employee leaves before that employee will not get gratuity.
For employees under a limited contract, gratuity entitlement depends on the duration of the contract. If an employee completes their limited contract term, they are entitled to receive end-of-service gratuity. The calculation for limited contract gratuity is as follows:
– If the contract is for one year or more but less than five years, the employee is entitled to 21 days’ basic salary for each year of service
– If the contract is for five years or more, the employee is entitled to 30 days’ basic salary for each year of service
End of Service Calculator in UAE
In addition to the gratuity calculator, there is also an end-of-service calculator in the UAE. This calculator helps employees to calculate their total end-of-service benefits, including gratuity, leave pay, and other allowances.
To use the end-of-service calculator, you need to enter your basic salary, the date of joining, the date of leaving, and the reason for leaving. The calculator will then provide you with a detailed breakdown of your end-of-service benefits.
Knowing your entitlements under UAE labour law is crucial for every employee. With the help of the gratuity calculator and end-of-service calculator, you can easily calculate your gratuity and other benefits. As an employee, it’s important to be aware of your rights and obligations under the law to avoid any disputes with your employer.