[WP-Coder title=”Cal UAE 1″]
If you’re an employee in Dubai or the UAE, understanding gratuity is essential. Gratuity is a lump sum payment that employers are required to pay to their employees at the end of their employment. It’s a reward for the employee’s service to the company, and it’s based on their length of service.
In this article, we’ll explain the basics of gratuity in Dubai and the UAE. We’ll discuss the laws surrounding gratuity and provide a step-by-step guide on how to calculate it. Additionally, we’ll include a gratuity calculator to help you estimate your gratuity payment.
How to Calculate Gratuity in Dubai 2022
If we want to understand gratuity, we should know what is a gratuity. In simple words, a gratuity is an amount that the employer is required to pay to the employee after completing or serving the company for a certain period of time in return for the services they provide. Let’s take a look at the formula and example.
If you want to calculate gratuity manually, you can simply enter your basic salary and number of years of service.
It is easy to do with this Online Gratuity Calculator tool. You can find an estimate of how much gratuity you can get when you retire by using the calculator.
How Gratuity Calculator Works
- Select the “Select Contract Type”
- Then Select the Location of your employment
- Circumstances if applicable
- Basic Salary
- For how long have you worked in the company?
How to Calculate your Gratuity in UAE
Which are the types of contracts?
There are limited and unlimited contracts in Dubai.
Let us know what the difference is between limited and unlimited contracts.
you can also visit the official website for more information.
Check eligibility for gratuity
How to calculate gratuity in UAE for unlimited contract
There isn’t a need to stay or serve specific years in unlimited contracts. The employee isn’t bound to any contract at all. One to three months’ notice is required for this.
The formula for Unlimited Contract
- 1 to 3 years of service
Gratuity = (Basic salary x 7 days x service years)/30 - 3 to 5 years of service
Gratuity = (Basic salary x 14 days x service years)/30 - 5 or more years of service
Gratuity = (Basic salary x 21 days x service years)/30
How to calculate gratuity in UAE for a limited contract
In limited contracts employees need to stay or serve specific years and number of days.
The formula for Limited Contract
- 1 to 5 years of service
Gratuity = (Basic salary x 21 days x service years)/30 - 5 or more years of service
Gratuity = (Basic salary x 30 days x service years)/30
New gratuity law in UAE 2022 calculator
As per the new gratuity law, you have to read this article
limited contract gratuity calculation
Gratuity Law in UAE
The Federal Law No. 8 of 1980, also known as the UAE Labour Law, outlines the rules regarding gratuity payments. According to this law, an employee who completes one year or more in continuous service is entitled to gratuity upon termination of their employment. The gratuity amount is based on the employee’s length of service, last drawn basic salary and the type of contract they have.
Gratuity Calculation in Dubai and UAE
To calculate gratuity, follow these steps:
Determine the type of contract: There are two types of contracts in the UAE – limited and unlimited. A limited contract has a specific end date, while an unlimited contract can be terminated by either party with notice.
Determine the last drawn basic salary: This is the base salary excluding any allowances, bonuses or overtime pay.
Determine the length of service: This is the total number of years and months worked for the employer. Any partial year is calculated proportionately.
Use our Gratuity Calculator for Free
Use our gratuity calculator to estimate your gratuity payment based on the above formula. Simply enter your last drawn basic salary, length of service and contract type into the calculator.
People also search
How to calculate gratuity in Dubai
How to calculate end-of-service gratuity in Dubai
How to calculate gratuity for an unlimited contract in Dubai
How to calculate gratuity in Dubai 2018
How to calculate gratuity in Dubai 2019
How do you calculate gratuity in Dubai