UAE Gratuity Calculator

Hey there! If you’re working in the UAE, you’ve probably heard about gratuity – it’s basically a “thank you” payment you get from your employer when you leave your job. Whether you’re wrapping up a long career or exploring new opportunities, knowing what you’ll receive can help you plan better. Let me break down how our Gratuity Calculator works and what you need to know about your end-of-service benefits.

Gratuity Calculator Tool

It’s super easy – you just need four things:

1. Basic Salary: Enter your most recent basic salary, excluding any additional allowances.
2. Contract Type: Select whether your contract is limited (fixed-term) or unlimited (open-ended).
3. Employment Period: Provide your start and end dates to determine your total service duration.
4. Reason for Leaving: Specify if you resigned, were terminated, or completed the contract term.

Don’t worry – this calculator follows UAE Labour Law to the letter, so you’ll get accurate numbers based on your specific situation.

Understanding Gratuity Calculation by Contract Type

Limited Contracts

If you’re on a fixed-term contract, here’s the deal:

• 1-5 Years of Service: Gratuity is calculated as 21 days of basic salary per year.

Formula: Gratuity=Basic Salary×21×Years of Service30\text{Gratuity} = \frac{\text{Basic Salary} \times 21 \times \text{Years of Service}}{30}Gratuity=30Basic Salary×21×Years of Service​

• Beyond 5 Years: 30 days of basic salary per year for additional years after the first five.

Unlimited Contracts

This is where it gets interesting! Your payout depends on how long you’ve worked and why you’re leaving:

• Resignation:
  • Less than 1 year: No gratuity.
  • 1-3 years: One-third of 21 days’ basic salary per year.
  • 3-5 years: Two-thirds of 21 days’ basic salary per year.
  • Over 5 years: Full gratuity (21 days for the first five years, plus 30 days per additional year).
• Termination:
  • Less than 1 year: No gratuity.
  • 1-5 years: 21 days’ basic salary per year.
  • Over 5 years: 21 days’ salary for each of the first five years, plus 30 days for each additional year.

Important Rules and Tips

According to Article 139 of UAE Labour Law, you might not get gratuity if:

• The employee resigns without proper notice.
• Termination due to misconduct, gross negligence, or unlawful actions.
• Less than one year of continuous service.

Tips for Accurate Calculator Use

Want to get the most accurate results? Here’s what to do:

• Confirm Basic Salary: Ensure you’re entering only your basic salary.
• Know Your Contract Type: Whether limited or unlimited, contract type affects calculation.
• Accurate Separation Type: Specify whether you resigned, were terminated, or completed the contract.
• Precise Start and End Dates: Accurate dates provide a more exact service duration.

Frequently Asked Questions (FAQs)

Who qualifies for gratuity in the UAE?
Expatriate employees are eligible, while UAE nationals have other end-of-service benefits through national pension plans.

Is there a cap on gratuity payouts?
Yes, the maximum payout is capped at two years’ basic salary, regardless of service length.

What happens if an employee resigns?
In the case of resignation under an unlimited contract, gratuity entitlement is reduced, especially within the first five years. Limited contract employees must complete their term for full gratuity.

Are there situations where gratuity isn’t paid?
Yes, gratuity may be denied for cases of misconduct, lack of proper notice, or if the employee has less than one year of service.

Think of the UAE Gratuity Calculator as your friendly guide to figuring out what you’ll get when you leave your job. It takes all those complicated rules from UAE Labour Law and makes them simple to understand. Still not sure about something? Don’t hesitate to chat with a legal expert or reach out to the UAE Labour Department – they’re there to help!