Complete Guide to Gratuity Calculation in UAE 2024
Everything you need to know about calculating end-of-service gratuity in the UAE, including examples, formulas, and legal requirements.
Complete Guide to Gratuity Calculation in UAE 2024
Master the art of calculating your end-of-service benefits
This comprehensive guide covers everything you need to know about gratuity calculations in the UAE, from basic formulas to complex scenarios.
What is Gratuity?
Gratuity, also known as end-of-service benefits or end-of-service gratuity, is a mandatory payment that employers in the UAE must provide to employees when their employment contract ends. This benefit is enshrined in UAE Federal Law No. 8 of 1980 (UAE Labour Law) and its amendments.
The amount of gratuity you receive depends on several factors including your length of service, basic salary, contract type, and reason for termination.
Gratuity Calculation Formula
The basic formula for gratuity calculation in UAE is:
- First 5 years: 21 days of basic salary for each year of service
- After 5 years: 30 days of basic salary for each additional year
Your daily salary is calculated as: Basic Monthly Salary ÷ 30