Gratuity Calculation in the UAE Gratuity in the UAE is a legally mandated end-of-service benefit, designed to recognize an employee’s contribution and provide financial security after their service ends. For employees, understanding how gratuity is calculated ensures transparency and better financial planning, while for employers, it helps maintain legal compliance and smooth final settlement. Key Factors Influencing Gratuity The total gratuity depends on a few essential legal and contractual elements: Length of Service: Employees must complete a minimum of one year of continuous service to qualify for gratuity. Contract Type: The method of calculation varies between limited and unlimited contracts, especially in resignation or early termination cases. Last Drawn Basic Salary: Only the basic salary at the time of contract termination is used—allowances and bonuses are excluded. Reason for Termination: Whether the employee resigns, retires, or is terminated affects the entitlement amount, particularly under unlimited contracts. UAE Gratuity Formula The UAE Labour Law provides a clear formula for gratuity calculation: Basic Gratuity Formula: Or simply: Gratuity = (Basic Salary × 21 ÷ 30) × Years of Service Up to 5 years of service: 21 days of basic salary per year. More than 5 years: 30 days of basic salary for each additional year. Partial years: Calculated proportionally on a pro-rata basis. To calculate UAE Gratuity Click https://gratuitycalculator-dubai... 📌 Example If an employee earns AED 6,000 basic salary and has completed 6 years of service: First 5 years: (6000×21÷30)×5=AED21,000(6000 × 21 ÷ 30) × 5 = AED 21,000(6000×21÷30)×5=AED21,000 Sixth year: (6000×30÷30)×1=AED6,000(6000 × 30 ÷ 30) × 1 = AED 6,000(6000×30÷30)×1=AED6,000 ✅ Total Gratuity = AED 27,000 Conclusion Gratuity calculation in the UAE is a well-structured legal process that safeguards employee rights and ensures employers fulfill their obligations fairly. By understanding the influencing factors and formula, both parties can avoid disputes, ensure accurate settlements, and maintain a professional end-of-service experience.

Gratuity calculator

Gratuity Calculator Dubai (UAE)

Gratuity Calculator Dubai (UAE)