UAE Gratuity Calculator

UAE Gratuity Formula:

\[ \text{Gratuity} = \left(\frac{\text{Salary}}{30}\right) \times 21 \times \text{Years} \]

For service between 1-5 years (limited)

\[ \text{Gratuity} = \left(\frac{\text{Salary}}{30}\right) \times 30 \times \text{Years} \]

For service over 5 years (unlimited)

Gratuity (AED):

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1. What is UAE End of Service Gratuity?

The UAE labor law mandates that employees are entitled to an end-of-service gratuity payment upon termination of employment, calculated based on their basic salary and years of service.

2. How Does the Calculator Work?

The calculator uses the UAE gratuity formula:

\[ \text{For 1-5 years: Gratuity} = \left(\frac{\text{Salary}}{30}\right) \times 21 \times \text{Years} \] \[ \text{For over 5 years: Gratuity} = \left(\frac{\text{Salary}}{30}\right) \times 30 \times (\text{Years}-5) + 5\text{-year maximum} \]

Where:

\( Salary \) — Basic monthly salary in AED
\( Years \) — Total years of service
\( 21 \) — Days per year for first 5 years
\( 30 \) — Days per year after 5 years

Explanation: The calculation differs based on whether the employee has served more or less than 5 years.

3. Importance of Gratuity Calculation

Details: Accurate gratuity calculation ensures employees receive their legal entitlements and employers comply with UAE labor laws.

4. Using the Calculator

Tips: Enter basic monthly salary in AED and total years of service. Partial years are accepted (e.g., 3.5 years).

5. Frequently Asked Questions (FAQ)

Q1: Is gratuity calculated on basic or total salary?
A: Gratuity is calculated only on basic salary, excluding allowances and bonuses.

Q2: What if employment is terminated before 1 year?
A: No gratuity is payable for service less than 1 year.

Q3: Are there different rules for different employment types?
A: Yes, limited contract and unlimited contract calculations differ. This calculator assumes unlimited contract rules.

Q4: How are partial years calculated?
A: Partial years are calculated proportionally (e.g., 6 months = 0.5 years).

Q5: Is there a maximum gratuity amount?
A: No maximum for unlimited contracts, but limited contracts may have different rules.