UAE Gratuity Calculator
Your Gratuity: 0 AED
Understanding your gratuity entitlement as an employee in the UAE is crucial, especially when planning for the future. Gratuity is a mandatory financial benefit granted to employees at the end of their service, as per the UAE Labour Law regulated by the Ministry of Human Resources and Emiratisation (MOHRE). This page provides a comprehensive guide to UAE gratuity laws, ensuring transparency for both employers and employees.
How Does The Gratuity Calculator Work?
- Enter your basic salary and length of service (Start date and End date).
- Select your contract type (Limited or Unlimited).
- Select your reason for leaving (Resigned or Terminated).
- Click “Calculate” to view your gratuity amount.
What is Gratuity in the UAE?
Gratuity, often referred to as an End-of-Service Benefit (EOSB), is a financial reward provided to employees upon resignation or termination, provided they meet certain conditions. This benefit is calculated based on an employee’s basic salary, duration of service, and the type of employment contract (limited or unlimited).
Conditions for Gratuity Calculation in the UAE
To be eligible for gratuity, employees must meet the following conditions:
Minimum Length of Service
- Employees must complete at least one year of continuous service to qualify for gratuity. Any period of employment less than one year does not entitle the employee to gratuity.
Basic Salary Basis
- Gratuity is calculated on the last basic salary (excluding allowances such as housing, transport, or other benefits).
Type of Employment Contract
- Limited Contract:
Employees under a limited contract are entitled to gratuity based on their total years of service:- 1–5 Years: 21 days of basic salary for each year.
- 5+ Years: 21 days for the first 5 years and 30 days for every additional year.
- Unlimited Contract:
Employees under an unlimited contract who resign may receive a reduced gratuity based on the following:- Less than 1 Year: No gratuity.
- 1–3 Years: 1/3 of 21 days’ basic salary per year.
- 3–5 Years: 2/3 of 21 days’ basic salary per year.
- 5+ Years: Full gratuity (same as limited contract).
- Limited Contract:
Termination vs. Resignation
- Terminated employees under both contracts are entitled to full gratuity as long as they have completed one year of service.
- Employees who resign under an unlimited contract may receive reduced gratuity if their service is less than 5 years.
Exclusions
- If an employee resigns without giving the required notice period, except in specific circumstances, they forfeit their gratuity entitlement. This applies to both unlimited contracts and limited contracts (if the resignation occurs before completing five years of service).
- Gratuity may also be denied if an employee is terminated for reasons specified under the law or if they resign to preempt a dismissal.
Frequently asked questions
Here are some frequently asked questions and their answers.
Employees with at least one year of continuous service are eligible for gratuity payments.
Employees who resign before completing one year of service are not entitled to gratuity payments.
The calculator is primarily designed for full-time employees; part-time employees may need to consult HR for specific rules.
In such a situation, the employers in within their rights to refuse gratuity to the terminated employee.
The total gratuity payment can not exceed the 2 years salary of the employees.