Gratuity Calculator Dubai


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Debate in any corner of the modern world about employment, labor laws, and business is incomplete without considering the UAE. Being the latest hub of business activities, Dubai opened its doors of opportunities to local and foreign communities. UAE labor gratuity calculator Dubai assists in estimating the gratuity amount according to the employee’s salary.

The firm legislation of Dubai is significant in fair manpower management. Policies are developed to help employees acquire a fine amount of money. This financial subsidy is awarded to those employees who provide their services for the betterment of the organization.

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Importance of a Gratuity Calculator in UAE

Gratuity is generally considered at the End of Service in the UAE. Foreign workers in Dubai are not eligible to be rewarded with a pension but a good amount of EOSB is set aside for them. The UAE Federal Labor Law states that each worker is eligible to be rewarded with a gratuity payment if they meet the criteria at the end of their service tenure.

In UAE, Companies utilizes the labor Gratuity Calculator to calculate the amount of money to be given as a salary element. Businesses generally hand over such jobs to their finance team and acquire the services of legal consultants to calculate the plan according to UAE law. An employer becomes eligible for gratuity, once he completes one year of service.

Factors affecting Gratuity in UAE

Gratuity is dependent upon two factors, one is the type of contract, and the other is the reason behind leaving the organization. UAE offers 2 types of contracts to every organization:

1.     Limited Contract 

The worker can sign an agreement for a specific time, whereas the company and the employees are permitted to cancel or extend the contract.

2.     Unlimited Contract

In this type of contract, workers are not bound to work for a particular period but both parties can reach a point of consensus to sign a contract permitting the worker to work as long as he desires.

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Calculating gratuity in Dubai

Gratuity is totally dependent upon the type of contract between the employee and employer. Various clauses are signed according to the type of contract so it definitely has a significant impact on salary and gratuity calculations. Below, we have shared the process for both types of contracts:

Gratuity calculation in Limited Contract

  • Calculating per day salary
  • Multiplication of salary with years of service that are 21 or 30
  • Results will present the annual gratuity
  • Multiplication of annual gratuity with years of service
  • The final result is the amount of gratuity to be provided to employees for limited contracts

The number of years an employee served in an organization affects the limited contract gratuity calculation. If an employee has worked for more than 1 year in any company, then 21 days’ wage will be considered for gratuity calculation in Dubai. For those who work for more than 5 years, 30 days’ salary will be considered for each year.

Gratuity calculation for Unlimited Contract

  • Calculating per day salary
  • Multiplication of salary with years of service that are 21 or 30
  • Results will present the annual gratuity
  • Count ⅓ or ⅔ of the annual gratuity according to the tenure of service
  • Multiplying annual gratuity with years of service

The final result is the amount of gratuity to be provided to employees for unlimited contracts

In the case of an unlimited contract, the number of years an employee served will have a great impact on the gratuity. For those who served from 1-3 years, ⅓ of the 21-day wage is applicable. When it comes to employees serving for more than 3 and less than 5 years, is ⅔ of 21 days wage.

Those employees who have unlimited contracts and keep working in a firm for more than 5 years will be eligible to acquire gratuity according to salary consideration for 30 days. Firms might face legal accusations if they wrongly computed gratuity.

Eligibility Criteria for Gratuity (UAE)

Authorities in UAE have set policies for the calculation of gratuity. If a person fails to comply with the rules and regulations set by the authorities of UAE, he might lose the chance for acquiring the service gratuity.

Below, we have mentioned some pro tips for you to save yourself from such subjects by:

  • Avoid leaving the company before the time span mentioned in the limited contract. Gratuity cannot be offered until an employee accomplish more than 5 years in any firm.
  • Avoid leaving the company without prior notice.
  • Submission of fake documents as originals might result in loss gratuity loss
  • Avoid damaging the company’s assets
  • Fulfill your duties with dedication during your service at the company

gratuity calculation for employees who resign or receive termination by the firm is different. 30-day wage will be applicable for employees who were terminated with zero complaints in their service. However, terms might get changed for those who submit resignations. There is the possibility that a worker would not get gratuity for leaving the firm before completion of tenure.

Rules Set for Gratuity Calculator Dubai

Labor contracts in UAE will play role in calculating the gratuity amounts by fair means. There must not be any injurious measures for unlimited contract gratuity or limited contract gratuity calculation. Terms and conditions on a calculation of gratuity in Dubai as per the laws will be answered below using the subsequent points

  • A worker who served less than one year is not eligible for gratuity.
  • Expats serving in UAE can apply for gratuity only, not a pension.
  • As per UAE Labor Law :Article 132, gratuity will not be offered for more than 2 years of wage
  • As per Article 34 of UAE Labor Law, a basic salary should be the basis for gratuity calculations. Extra allowance like food, medical, etc. will not be added.
  • UAE Labor Law, Article 135, addresses that if a worker takes a loan from the firm, then an employer has permission to deduct the loan amount from gratuity

The amount of Gratuity is different depending upon the

  1. License type
  2.  Reasons for leaving the firm
  3. Years of service
  4. Registration with Gratuity Calculator UAE

Our registered companies with Gratuity Calculator UAE have been working on the calculation on the basis of set rules and regulations by UAE authorities. Our associate law firm has the best Advocates in UAE and is offering the best services to its client across UAE. Our associate law firm has expertise in dealing with numerous legal issues.

Employment contracts play a crucial role in protecting the rights of employees and employers. It is important to ensure that employment contracts are properly drafted and adhere to labor laws to avoid any legal disputes that may arise during the course of employment. In the UAE, labor laws entitle employees to a range of benefits, including service benefits, gratuity, and daily wages.

An employee who has worked for over two years is entitled to a service benefit, which is calculated based on their salary and the number of years they have worked. Days of absence from work without pay can affect an employee’s entitlement to such benefits, and it is important to ensure that these issues are addressed in the employment contract.

Similarly, employees are entitled to receive daily wages for every year of work, and an employer must pay an employee for any work done without pay. Employers must also pay gratuity to employees who have completed at least one year of work, unless the employment contract provides for an alternative gratuity scheme.

At our law firm, we have extensive experience in advising and representing clients on all aspects of employment contracts, labor laws, and employee entitlements. We work closely with our clients to ensure that their employment contracts adhere to labor laws and protect their rights as employees or employers. Contact us today to schedule a consultation with our experienced legal team.

In the UAE, employees who have completed at least one year of work with an employer are entitled to receive gratuity. The amount of gratuity is calculated based on the employee’s salary and the length of their service. It is important for employers to ensure that they comply with labor laws and provide employees with their entitled gratuity.

UAE labour law establishes minimum terms for employment contracts, including working hours, vacation time, and wages. Employers are required to comply with these minimum terms, which are designed to protect the rights of employees and ensure fair treatment in the workplace. Violations of these terms can result in legal consequences for employers.



Q How is gratuity determined in Dubai?

A worker is entitled to full gratuity compensation based on 21 days of salary for each year of service if they have worked for the company for more than a year but less than five years. A worker who has worked for more than five years is entitled to a full gratuity of 30 days' pay for each additional year of employment.

Q How is gratuity determined five years later?

The formula for calculating gratuities is gratuity = (15 working tenure latest drawn wage). For instance, even after seven years of employment, a corporation is not protected by the Gratuity Act. Additionally, your base pay was Rs. 35,000.

Q Can I receive a gratuity five years after my resignation?

According to the Payment of Gratuity Act of 1972, an employee can only receive gratuity after working for the company for at least five years. The employee is eligible to receive the gratuity sum upon superannuation, retirement, or resignation.

Q Q: Who is eligible for gratuity in Dubai?

A: All employees who have completed one or more years of continuous service with an employer are eligible for gratuity in Dubai.

Q Q: Is there a maximum limit for gratuity in Dubai?

A: Yes, there is a maximum limit for gratuity in Dubai, which is based on an employee's basic salary and length of service.

Q Q: Is gratuity taxable in Dubai?

A: No, gratuity is not taxable in Dubai.

Q Q: How can employees verify their gratuity entitlements in Dubai?

A: Employees in Dubai can use a gratuity calculator or consult with their employer or the Ministry of Human Resources and Emiratisation to verify their entitlements.

Q Q: Are there any exceptions to the gratuity law in Dubai?

A: There are some exceptions to the gratuity law in Dubai, such as in cases of termination for cause or early termination of a fixed-term contract.

Q Q: Can employees receive gratuity if they resign?

A: Yes, employees who resign from their jobs in Dubai are entitled to receive gratuity.

Q Q: Is gratuity taxable in Dubai?

A: No, gratuity is not taxable in Dubai.