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Your Basic Salary:
|Total Gratuity You Should Recieve
How Gratuity is Calculated in Dubai UAE:
The UAE labor law offers a generous reward for dedicated service: end-of-service benefits, or Gratuity! This valuable benefit kicks in after just one year of loyal employment and grows steadily with experience.
Here’s how it works:
- Every year you commit, you earn 21 days’ worth of your final salary in Gratuity, up to your fifth year.
- After five years of dedication, your reward increases to 30 days’ salary for each additional year you serve.
Remember, absences without pay don’t count towards your service time, and your employer can deduct any outstanding debts from your final Gratuity payment. It’s a fair and transparent system that recognizes your hard work and commitment.
Gratuity in Dubai UAE:
In the United Arab Emirates and Dubai, your commitment thrives! After just one year of service, you earn the right to a unique appreciation called “Gratuity” (مكافأة). This fantastic reward grows with your loyalty, acknowledging your dedication and adding a financial flourish to your journey.
Eligibility Criteria for Gratuity in Dubai UAE:
To be eligible for gratuity, the following conditions must be met:
- The employee should have a tenure of more than one year with the company.
- Continuous service in the organization for a period exceeding one year is a prerequisite.
- The employee must voluntarily resign from their position.
- In cases where an employee departs the organization before the contract concludes, they are not eligible for gratuity.
- Both UAE nationals and expatriates are entitled to gratuity benefits.
How is gratuity calculated manually in Dubai UAE?
Certainly, individuals have the option to manually calculate their gratuity or utilize a gratuity calculator tailored for the UAE. A straightforward method involves multiplying the daily wage by either 21 or 30, depending on the duration of service within the company. For instance, with a daily wage of 333.30, the calculation would be 333.30 x 21, resulting in 6,999.30. This approach offers a practical way to determine gratuity entitlements.
Crucial Factors for Gratuity Calculation:
1. Type of Contract: In the UAE, employment contracts are primarily of two types: limited and unlimited. Each type has distinct rules for gratuity calculation, detailed below.
2. Last Basic Salary: The basis for gratuity calculation is the last basic salary. However, bonuses and allowances such as housing, conveyance, overtime, and others should not be included.
3. Duration of Employment: A minimum of one year of completed employment is necessary to be eligible for gratuity.
4. Continuous Employment: Gratuity computation is based on continuous employment. Absences without pay during the service period are not considered in the calculation.
How Gratuity Calculator Dubai Works:
For Unlimited Contract:
- Before 1 year: Not entitled to any gratuity.
- Between 1 and 3 years: One-third of 21 days’ basic salary for each year.
- Between 3 and 5 years: Two-thirds of 21 days’ basic salary for each year.
- After 5 years: 21 days’ basic salary for the first 5 years and 30 days’ basic salary for each additional year.
- Before 1 year: Not entitled to any gratuity.
- Between 1 and 5 years: 21 days’ basic salary for each year.
- After 5 years: 30 days’ basic salary for each year after the first 5 years and 21 days’ basic salary for the first five years. Total gratuity should not exceed two years of basic salary.
For Limited Contract:
- Less than 1 year: Not entitled to any gratuity.
- Between 1 and 5 years: Gratuity based on 21 days’ salary for each year.
- More than 5 years: Gratuity of 30 days’ salary for each year after the first 5 years, plus 21 days’ basic salary for each year for the first 5 years. Total gratuity should not exceed two years of basic salary.
Frequently Asked Questions (FAQs)
Is gratuity calculated on basic salary in Dubai UAE?
Employees can easily determine their end-of-service gratuity by considering the final salary entitlement, specifically the basic salary. It’s important to note that allowances such as conveyance, utilities, furniture, etc., are not included in this calculation. To simplify the process, individuals in Dubai can use a user-friendly gratuity calculator to accurately compute their gratuity.
Are expats eligible for end of service benefits?
Expatriates are eligible for gratuity as part of their end-of-service benefits, though they are not eligible for a pension.
If the company terminates an employee, will the employee still get gratuity?
If an employee breaks any company rules, the organization can fire them, and they won’t get gratuity.
Is there a maximum limit to the gratuity amount offered?
The highest gratuity given should not be more than the employee’s two years’ salary.
Do we include periods of not working when calculating gratuity?
If you didn’t get paid for the days you were absent, those days won’t count towards your gratuity.
Will I receive gratuity if I resign?
Yes, employees receive gratuity benefits if they retire or resign. It depends on the terms and conditions, and if the employee has worked for at least one year, they are entitled to gratuity.
What are the latest rules for gratuity in the UAE?
Under the new labor law, contracts are now limited to five years. Gratuity is calculated at 21 days of basic salary per year of service in a UAE company. If the employee has over five years of service, they are entitled to 30 days of gratuity.
Is gratuity included in the monthly salary?
Gratuity is a benefit given to employees based on their years of service, but it is not part of the usual monthly salary. However, if the employee works for three to five years, the gratuity is calculated at 21 days of basic salary per year.
How many years do I need to work to get gratuity in Dubai?
If an employee works for less than 1 year, they won’t get gratuity. For those employed between 1 to 5 years, gratuity is calculated at 21 days’ salary for each year. If the employee has more than 5 years of service, they get 30 days of gratuity.