gratuity calculator UAE 2023 New way to calculate

The United Arab Emirates labor law clearly has stated that Employer companies are responsible for paying end-service compensation to the employees depending on the years of the services. The gratuity calculator UAE has been developed on the provision of the labor law of the UAE so, it will calculate the gratuity amount that you may entitle after ending your relationship with the employer.

Before you calculate the gratuities, you should be aware of the types of contracts that you signed with your former employer. There are three types of contracts available in the UAE.

1. Limited contract: This contract is signed for a certain time, for example, 1yrs, or 2yrs contract. Once your contract has been completed, you may either go back home or continue working with employers after renewing it.
2. Unlimited Contract: Since this is an open-ended contract, you may not be required to renew it with your employer. You can work and stay in the UAE for as long as you want, but you must renew your resident visa every two years. This contract can terminate by mutual consent between the employer and the employee.
3. Temporary contract: The employer can hire the employee on a temporary basis for a specific project. When a project completes, the contract will expire, but the employer may offer another contract for a different project.

Many people are confused here about understanding the limited and unlimited contracts, so, I think this example will help you to understand them.

Look; you signed a limited contract with your employers for 2yrs. After completing 2yrs you need to go back to your country or make a new contract for 2yrs again.

Every two years you need to sign a new contract with your employer, This process can go on as long as both parties agree upon it.

Along with the contract, you should renew your visa, labor card, and other official documents to work and stay in this country.

Download UAE Gratuity and overtime calculator on your phone click download

Contract Gratuity calculator in UAE 

How does the gratuity calculate in UAE?

Not everybody will be entitled to the gratuity because there are various terms and conditions for end-service compensation.

After the Unlimited or Limited contract expires, the employer must pay the end service benefit to the employees.

No gratuity pay conditions; 

• If you leave the job before completing the 1 year.

Employer dismiss you without notice cause of the following;

1. If it is found that you submitted a false identity or nationality or submits forged certificates or documents to obtain a visa and job.
2. You are engaged on probation and are dismissed during or at the end of the
   a probationary period;
3. commits a fault resulting in a substantial material loss to the employer,
   provided that the latter notifies the labor department of the incident within
   48 hours of your becoming aware of its occurrence;
4. disobeys instructions on the safety of work or workplace, provided that such
   instructions are in writing and posted at a conspicuous place and are
   communicated verbally to the worker, in case he is illiterate;
5. defaults on his basic duties under the contract and fail to redress such default
   despite a written interrogation and a warning that he will be dismissed if such
   default is repeated;
6.  finally convicted by a competent court of a crime against honor, honesty or
   public morals
7. reveals any confidential information about his employer;
8.  found in a state of drunkenness or under the influence of a narcotic drug
   during working hours;
9. assaults the employer, the manager in charge, or any of his workmates during
   working hours; or
10. absents from work without a valid reason for more than 20 nonsuccessive days in one single year, or for more than seven successive days

Despite, your dismissal from the employer based on the above reasons if you are a victim of the following will entitle you to gratuity.

1. If the employer fails to honor his obligations towards you, as provided for in the contract or this Law.
2. If you are assaulted by the employer or the employer’s legal representative

How does the gratuity calculate in the UAE?

Although our UAE end-of-service calculator will calculate an accurate amount for your gratuity, here is the formula for your convenience:

The gratuity calculation formula for Limited contract

1. Leaving the job less than 1yrs = no gratuity.
2. Completion 1yrs to 5yrs tenure = 21 days salary for each year.  formula;
   • (21*basic salary/30*years of services= Gratuity amount)
   • suppose your basic salary is 3000 and have completed 4yrs now gratuity is
   • 21*3000/30*4 = gratuity AED 8400
3. Working longer the 5yrs = 30days salary for each year’s formula;
   • (30*basic salary/30*years of services= Gratuity amount)
   • suppose your basic salary is 3000 and have completed 6yrs now gratuity is
   • 30*3000/30*6 = gratuity AED 18000

The gratuity calculation formula for an unlimited contract;

1. Leaving the job less than 1yrs = no gratuity.
2. Completion 1yrs to 5yrs tenure = 21 days salary for each year.  formula;
   • (21*basic salary/30*years of services= Gratuity amount)
   • suppose your basic salary is 3000 and have completed 4yrs now gratuity is
   • 21*3000/30*4 = gratuity AED 8400
3. Working longer the 5yrs = 30days salary for each year’s formula;
   • (30*basic salary/30*years of services= Gratuity amount)
   • suppose your basic salary is 3000 and have completed 6yrs now gratuity is
   • 30*3000/30*6 = gratuity AED 18000

Until 2022, there was a different method for calculating gratuity in the UAE, but the government changed it to the same approach for all types of contracts.

Companies in the UAE use the above formula to compute employee gratuities. For each additional month of work, you will receive one day’s remuneration.

Gratuity in UAE is the provision of the federal labor law, so, it is applicable everywhere in the UAE regardless of the territory of the organization.

If you are looking for a gratuity calculator in Dubai, you should use the above calculator because Dubai has no different calculators and labor laws.

Conclusion: This gratuity calculator UAE has been developed based on the UAE labor law and calculates the accurate data that you may entitle to.

If the employer does not want to pay the gratuity you can report to MOHRE (Ministry Of Human Resource and Emiratisation) or suit the labor court of the UAE.

Labor law UAE pfd