Understanding Your Gratuity Entitlement
Calculating your end-of-service gratuity in the UAE is simpler than you might think. Under UAE Labour Law, you are entitled to 21 days’ pay for each year of service for the first five years, and 30 days’ pay for each year beyond that. It’s important to note that only your basic salary is used for the calculation allowances, bonuses, and commissions are not included.
Here’s a quick breakdown:
- First, calculate your total years and months of service (you must complete at least one year).
- Divide your last drawn basic monthly salary by 30 to find your daily wage.
- Multiply the daily wage by 21 or 30 depending on how many years you’ve worked.
- For any partial year, calculate on a pro-rata basis.
Example:
Suppose you worked for 7 years and 4 months with a basic salary of AED 12,000/month:
- Daily wage = 12,000 ÷ 30 = AED 400
- First 5 years = 5 × 21 × 400 = AED 42,000
- Next 2 years = 2 × 30 × 400 = AED 24,000
- 4 months pro-rated = (30 × 4/12) × 400 = AED 4,000
- Total gratuity = AED 70,000
UAE Gratuity Calculator
Frequently Asked Questions
Can I claim gratuity if I resign?
Yes, you are eligible if you have completed at least one year of service. However, if you resign before completing two years, the amount may be reduced.
Are allowances or overtime included in gratuity?
No, only the basic salary is considered for gratuity calculation.
Does time spent on probation count?
No, gratuity is not applicable for time spent on probation if it’s less than one year.