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Last Updated on October 23, 2024
When it comes to how to calculate gratuity in UAE for unlimited contract, you can either do it manually using a simple formula or rely on an online gratuity calculator.
However, ensure that the online calculators you use are up-to-date with the current UAE labour law and the recent ministerial decrees related to labor regulations.
In the past, employers calculated gratuity differently for limited and unlimited contracts. Now, they use a unified formula that applies to both types of contracts.
How to calculate gratuity in UAE for unlimited contract
Gratuity is not payable under the following conditions:
- Service Less Than 1 Year: No gratuity is paid.
- Service Between 1 and 5 Years: 21 days of basic salary for each year of service.
- Service Over 5 Years: 30 days of basic salary for each year of service.
Example 1: If you have completed 4 years of service and your latest basic salary is 3,000 AED:
Daily salary calculation: 3,000 AED ÷ 30 = 100 AED per day
Total gratuity for 4 years: 100 AED × 21 days × 4 years = 8,400 AED
Example 2: If you have completed 6 years of service and your latest basic salary is 3,000 AED:
Daily salary calculation: 3,000 AED ÷ 30 = 100 AED per day
Total gratuity for 6 years: (100 AED × 21 days × 5 years) + (100 AED × 30 days × 1 year) = 10,500 AED + 3,000 AED = 13,500 AED
Gratuity calculator in uae
Disclaimer;
The Gratuity Calculator helps you estimate your gratuity based on UAE labor laws according to the information you provide. However, you should only use the results for informational purposes, because it is not a legal tool.
The calculations may not be entirely accurate due to various factors, such as compensation received during your employment, specific terms of your employment contract, or incomplete details provided.
Gratuity Calculator Dubai does not take responsibility for any inaccuracies in the calculations, and you should not rely on the results for legal or official purposes.
We strongly recommend consulting with a qualified lawyer or legal professional for precise and legally binding advice.
Apart from the gratuity what else the employer should pay you?
In addition to gratuity, your employer is also responsible for paying:
- Any due annual leave
- Unpaid salary for the current month
- Unpaid overtime
- Unpaid holidays, and other entitlements.
Conclusion:
The method outlined above provides a gratuity calculation for the UAE in 2024, but this may change if the government introduces new employment regulations.
While the 2024 gratuity calculator offers an accurate estimate of your end-of-service compensation, various factors could still affect the final amount.
