1. What is UAE Labour Law Gratuity?

The UAE Labour Law mandates that employees who complete at least one year of continuous service are entitled to an end-of-service gratuity payment. The amount depends on the basic salary and length of service.

2. How Does the Calculator Work?

The calculator uses the UAE Labour Law gratuity formula:

Where:

• \( Basic \) — Basic salary (AED)
• \( Y_{1-5} \) — Years of service from 1 to 5 years
• \( Y_{>5} \) — Years of service beyond 5 years

Explanation: For first 5 years, employee gets 21 days pay per year. For service beyond 5 years, employee gets 30 days pay per year.

3. Importance of Gratuity Calculation

Details: Accurate gratuity calculation ensures employees receive their rightful end-of-service benefits and helps employers comply with UAE Labour Law requirements.

4. Using the Calculator

Tips: Enter basic salary in AED, years of service (1-5) and years beyond 5. All values must be valid (salary > 0, years ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: What's included in basic salary for gratuity?
A: Only the fixed basic salary component, excluding allowances, bonuses, or commissions.

Q2: What if service is less than 1 year?
A: No gratuity is payable for service less than 1 year under UAE Labour Law.

Q3: How is partial year calculated?
A: Partial years are calculated proportionally (e.g., 6 months = 0.5 years).

Q4: Are there different rules for termination vs resignation?
A: Yes, resignation before 5 years reduces gratuity to 1/3 (1-3 years) or 2/3 (3-5 years) of full amount.

Q5: What about unlimited contracts?
A: The same gratuity calculation applies to unlimited contracts under UAE Labour Law.