UAE Gratuity Calculator: Understanding Your Rights in UAE

Understanding your end-of-service benefits is crucial for any professional working in the United Arab Emirates. The gratuity is a mandatory payment made by an employer to an employee upon the termination of their contract, provided they have completed at least one year of continuous service. This payment serves as a recognition of the employee’s contribution to the company.

This UAE Gratuity Calculation guide provides a straightforward explanation of how to use a UAE gratuity calculator online & in accordance with UAE Labour Law, While the calculation can appear complex, understanding the core components will allow you to get a clear and accurate estimate of the amount you are entitled to receive in AED.

• Dh5,000 ÷ 30 = 166.666 (Your daily wage is dh166.666)
• Dh166.66 x 21 = 3500 (21 days salary is dh3500, now multiply this with number of years)
• Dh3500 x 2  = 7000 (Your 2 years Gratuity amount is dh7000, you can multiply the 21 days salary for every your year of service up to 5 years).

If you have worked for more than 5 years, the end-of-service benefits are calculated as follows:

• Dh5,000 ÷ 30 = 166.666 (Your daily wage is dh166.666)
• Dh166.666 x 30 = 5,000 (30 days salary is dh5,000, now multiply this with number of years)
• Dh5,000 x 6 = 30,000 (Your six years gratuity is dh30,000).

According to UAE Labour Law, an employee on a limited contract who completes their term or resigns after the probation period is typically entitled to the full gratuity calculation, without the reductions applied to unlimited contract.

Using an Online UAE Gratuity Calculator

While the manual calculation provides a clear understanding, Our Reliable online UAE gratuity calculator is the most efficient tool for this task. Mostly gratuity calculated in UAE matches our calculator numbers. These digital calculators are designed to incorporate all the nuances of the UAE Labour Law. You simply need to input your basic salary, contract type, and your employment start and end dates to receive an immediate and accurate estimate of your end-of-service benefits.

Note: For exact end-of-service benefits and the gratuity amount, we recommend you to check with your HR department. This is just a guide that gives approximate amount of gratuity after a person enter his/her contract details. Thanks

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Conclusion

Calculating your end-of-service gratuity in the UAE is a systematic process that hinges on your basic salary, length of service, and contract type. By familiarizing yourself with these factors, you can better plan your financial future following the conclusion of your employment. While a UAE gratuity calculator offers an excellent estimate, it is always advisable to consult with your company’s HR department or a legal professional to obtain precise figures and fully understand your rights and obligations under the UAE Labour Law.

In Summary:

• Eligibility: You are entitled to gratuity after completing at least one year of continuous service.
• Core Factors: The calculation is based on your last drawn basic salary, contract type (limited or unlimited), and total years of service.
• Calculation Rate: It is 21 days of basic pay for each of the first five years, increasing to 30 days per year thereafter.
• Resignation Clause: Resigning from an unlimited contract with less than five years of service may lead to a reduced payment.
• Maximum Limit: The final gratuity amount cannot exceed the equivalent of two years of your full salary.