Gratuity Calculator in the UAE

1. Gratuity calculator UAE

With the gratuity calculator, you will be able to know the exact amount that you must pay an employee for the end of the service. 

The labor law of the United Arab Emirates establishes this bonus for those employees who have completed at least 1 year of service.

 Therefore, employees who resign or are fired before the said time are not entitled to receive it. 

2. Factors to consider for the gratuity calculation UAE

Before using the gratuity calculator Dubai to find out the end-of-service amount, there are a few things to consider. Next, you will be able to see in detail each of the elements that condition the calculation:

2.1 The type of contract

You must consider contract rates in terms of time in your gratuity payment calculations. In the UAE there are two types of agreements, namely limited contracts and unlimited contracts, each with its characteristics. In this sense, the gratuity for limited contract is not the same as for an unlimited contract.

2.2 Basic salary

The gratuity calculator Abu Dhabi uses the latest base salary to set the amount of the final payment to the employee. Therefore, the calculator does not take into account the following assignments:

• -Bonuses
• -Housing Assignments
• -Transportation benefits
• -Extra hours
• -The educational subsidy, among others

2.3 Total service time

As we mentioned before, this benefit can only be received by employees with at least 1 year of service. In addition, to use the gratuity calculator you must take into account that the employment time must be continuous. That is, the periods without pay that the employee has taken during his service do not count for the calculation.

Therefore, you must consider these details since the calculator performs the continuous count from the first to the last day of service. Thus, you must make the corresponding adjustment in the gratuity calculator Sharjah depending on whether there is a period without pay. 

3. How the UAE Gratuity Calculator works

To know how to calculate gratuity in UAE, you will first need to consider the type of contract of the employee. In this regard, we will show you the rules for calculation with a limited and unlimited contract.

3.1 Gratuity calculator UAE 2022 for unlimited contract

With the MOHRE gratuity calculator, you will be able to know the amount you must pay to the employee for the end of service. However, the calculation will depend on whether the employee quits or terminated as follows:

3.1.1 Waiver

If the worker quits their job, the amount of the gratuity will be calculated as follows:

• -Before the year of service, the employee will not receive the payment.
• -From 1 to 3 years in employment, the worker will receive 1/3 of 21 days of salary for each year of service.
• -From 3 to 5 years in employment, the worker will receive 2/3 of 21 days of salary for each year of service.
• -For 5 or more years of service, the employee will receive 21 days of salary for the first 5 years. In addition, they will receive 30 days of salary for each year over the top 5.

3.1.2 Termination

With the gratuity calculator, you will also be able to know the amount if the employer terminated the contract of the employee in the following way:

• -For less than one year of service, the employee will not receive the gratuity.
• -From 1 to 5 years of service, the employee will receive 21 days of salary for each year of service.
• -For more than 5 years of service, the employee will receive 21 days of salary for each year of service for the first 5. Also, he/her will receive 30 days of service for each year after the first 5.

However, the end-of-service gratuity may not exceed the base salary of two years.

3.2 Limited contract gratuity calculator

In this case, the gratuity calculator takes into account that the employee has completed the limited contract. To do this, perform the calculations considering the rules for awarding the payment as follows:

• -An employee with less than one year of service, cannot receive a gratuity payment.
• -For a service between 1 and 5 years, the employee receives 21 days of salary for each year of work.
• -For a service greater than 5 years, the employee receives 21 days of salary for each year of work. In addition, you must receive 30 days of salary for each year of work after the first 5.

As in the case of an unlimited contract, the payment must not exceed the salary of two years of work.