Online Gratuity Calculator UAE 2024 (Updated with MOHRE)

Gratuity (مكافأة) is a payment given to an employee by their employer in the UAE and Dubai at the end of their service. UAE Labour Law says employers must pay gratuity to workers after one year of service. This payment is based on the service rules, how the employee left their job, and the type of service contract.

How Does the UAE Gratuity Calculator Work?

Calculating gratuity pay by hand can be tricky and might lead to mistakes. An online gratuity calculator is a free tool for easy UAE gratuity calculation. It gives an estimate by asking for your details like your salary, service years, contract type (limited or unlimited contract), and how you left your job. This tool makes UAE gratuity calculation simple with a few clicks.

Key Steps for Calculating End-of-Service Benefits

Article 51 of the UAE Labour Law states that gratuity is a benefit for expatriate employees in the private sector. To get an estimate with the online calculator, you need to know some details about yourself. This includes your basic salary, the length of your service, and your contract type.

Complete Minimum Service Period

You must work for at least one year to get gratuity pay. If you don’t meet this requirement, you won’t get the payment in the private or public sector.

Know your Basic Salary

Your basic salary is the base for calculating gratuity. Make sure to enter your exact salary to get an accurate gratuity estimate.

Enter the Contract Type

Choose whether you had a limited or unlimited contract. This depends on the type of contract you had with your employer.

Select the Way by Which You Left your Job

Choose how you left your job. This affects how your gratuity is calculated. It’s important to be accurate here.

Add the Start and End Date of your Service

Enter the start and end dates of your job to get a precise gratuity estimate.

Gratuity Calculation Formula for Limited Contract

In limited contracts, you agree to work for a set number of years. If you don’t complete this, you might lose your rights, including gratuity.

• Service Years: 1 to 5 years
• Gratuity = (Basic salary x 21 days x service years)/30

• Service Years: More than 5 years
• Gratuity = (Basic salary x 30 days x service years)/30

Gratuity Calculation Formula for Unlimited Contracts

With an unlimited contract, you don’t agree to a specific number of years. You can leave with one to three months’ notice. You’re entitled to gratuity if you resign or get terminated.

Resignation

Here are the rules for end-of-service benefits for those who resign from unlimited contracts:

• Resigning before 1 year means no gratuity from the employer or hiring company.
• Resigning after 1-3 years means 1/3 of 21 days basic salary for each year as gratuity.
• Resigning after 3-5 years means 2/3 of 21 days basic salary for each year as gratuity.
• Resigning after 5 years means 21 days of basic salary for the first 5 years and 30 days for each year after.

Termination

Here are the new rules for termination:

• Terminated before 1 year, no gratuity entitlements.
• Terminated after 1 but less than 5 years, 21 days of basic pay for each year as gratuity.
• Terminated after 5 years, 21 days of basic pay for the first 5 years and 30 days for each year after.

Can Gratuity be Denied?

Article 139 of the UAE Labour Law explains when an employee might not get gratuity. Here are the reasons:

• Resigning without proper notice, except for certain reasons, means no gratuity. This includes unlimited contracts and limited contracts before five years.
• Terminated for certain reasons or resigning to avoid dismissal might also mean no gratuity.

Secure Your Gratuity Benefits

To get your gratuity, make sure you meet the UAE Labour Law’s requirements. This includes at least one year of continuous service. Keep good records of your employment, like contracts and salary statements.

When you leave or are let go, ask your employer for your gratuity. If there’s a dispute, get help from authorities or a lawyer to get your benefits.

To get your gratuity in the UAE, follow these steps:

Familiarize yourself with your Employment Contract

Read your contract well before starting work in the UAE. Each job and contract has its own rules for end-of-service benefits.

Know your Legal Rights in the Emirates

Learn about the UAE Labour Law and its rules on gratuity. This will help you understand when you’re eligible and when you’re not.

Keep your Employment Record

Keep track of your employment history. This includes start and end dates, salary details, and contract terms. It will help you claim your gratuity when needed.

Discuss Concerns with your Employer

Talk openly with your employer about gratuity concerns or questions. This ensures you both understand each other throughout your job.

Seek Legal Assistance

If you have disputes or questions about gratuity, get help from a labour law expert. This will protect your rights and help you get your benefits in the UAE.

FAQ’s

Who is eligible for gratuity in UAE?

In UAE, gratuity pay is only applicable to expatriate employees. The UAE nationals are not eligible for gratuity because they receive mandatory National Pension Plans, for which expatriate workers don’t qualify.

When does an Employee become Eligible for Gratuity in UAE?

UAE employees become eligible for gratuity at the end of their service tenure, either termination or resignation. But, the employees who have served an institute for less than one year are not entitled for gratuity pay.

Is there any limit for Gratuity payable?

The employee’s last basic salary (excluding allowances such as utility, conveyance, residence, etc.) is used for UAE gratuity computation. However, the total gratuity payable amount can’t exceed the employee’s 2 years salary amount.

What is the criterion for calculating gratuity accrued in UAE?

The employee’s total accrued gratuity is calculated based on the number of days per year of service. Gratuity in the UAE accrues at the following rate:

• For the first 5 years: 21 days per year
• For more than 5 years: 30 days per year

What are the Conditions in which an employer can deny gratuity payment to an employee?

An employer may refuse gratuity pay to his employee if:

• The employee is involved in unlawful activities like misbehavior, property loss, or violence.
• If the employee doesn’t have legal proof of contract.
• The employee hasn’t completed his one-year tenure of service.