Gratuity Calculator UAE

Undoubtedly, the economic condition in the United Arab Emirates is increasing at a higher rate. The industrial development has also solidified the economy, and that has made the UAE a dreamland for jobseekers. And to attract more employees, the UAE government has also introduced different schemes under the UAE Labour Law, and one such scheme is the End-of-service gratuity. If you have been working for a company in the UAE for years and are now considering switching your job, then you should know about your end-of-service gratuity. The rules say you will get your gratuity at the end of your service if you have worked one year for your company. So, how much gratuity you will get from your employer? Well, you can now easily calculate that using our Gratuity Calculator. Our Gratuity Calculator is quite simple to use and offers accurate results when you enter the required information.

What Do You Mean by Gratuity?

In simple words, it is a legal right a worker can claim when he leaves the job. It is a lump-sum amount, or you can also say a token of appreciation that is paid by a company or employer to the employees for their years of service and loyalty towards the company. It is generally offered when employees resign, are laid off or retire after completing 5 years of employment. As per the UAE Labour Law, employees working on unlimited as well as limited contracts have the right to receive gratuity. This is crucial for all employees in the UAE who deserve appreciation and respect for their years of contribution towards their company. The total amount of gratuity will depend on your basic salary. Wondering how to calculate your gratuity amount? Well, you will be happy to know the calculation process is very easy. You can calculate it instantly using InsideMENA’s Gratuity Calculator. However, before you can use our gratuity calculator, it will be better for you to understand the eligibility for it and the relevant rules. Continue reading to explore more about it.

InsideMENA’s Gratuity Calculator

We bring you our new and easy-to-use Gratuity Calculator, using which you can calculate your total gratuity amount with a few simple clicks. It provides you with an estimate of the total amount you would receive when you quit your job or retire after working continuously for five years. Our gratuity calculator is free to use.

Considering the results you get from this tool, you can then effectively plan your different financial goals, such as investments, retirement, etc. We understand that calculating your gratuity amount manually can be a challenging task. That’s why we are here with our advanced gratuity calculator to make the process easier and faster for you. This calculator works Based on the standard employment gratuity calculation formula in UAE. According to the UAE Labour laws, the calculation should be based on the employment contract type, i.e., Unlimited Contract or Limited Contract. You need to enter information like your tenure of service, last drawn salary, separation type (resignation or termination), etc. and our calculator will display the results within a few seconds.

Some Important Factors You Need to Consider While Calculating Your Gratuity

While we can assure you that our gratuity calculator can offer accurate results, it will also depend on the data entered by you. So, to ensure better result accuracy, you will have to consider the following factors:

• Contract Type: Your gratuity will greatly depend on the contract type, and in the UAE, you will find two different types of employment contracts, i.e., Limited and Unlimited. While both are similar, but the gratuity calculation rules will be different.
• Termination Type: Another major factor to consider here is the nature of termination. If you have been terminated under the UAE Labor Law, Article 120, you will not receive any gratuity. Even though you have worked on an unlimited contract, the gratuity will vary based on whether you got terminated or resigned.
• Work Period or Duration of Your Employment: The UAE Labour Laws state that only employees who have been working with the company for one year or more can get a gratuity. It may be noted that the duration will be calculated considering the days worked. It will not include your leaves, like sabbaticals. The reason behind this is our gratuity calculator assumes regular service between your first and last working day with the company. As per the UAE MoHRE- Ministry of Human Resources and Emiratization, a 1-year employment period shouldn’t include unpaid holidays or breaks.
• Last Basic Salary: To accurately calculate your gratuity in UAE, you need to enter the last basic salary you received before the termination of your contract. It may be noted that your basic salary shouldn’t include allowances or additional benefits. Let’s understand this with a simple example. If your monthly salary is AED 3,000, excluding housing, fuel allowance, etc., then your basic salary is AED 3,000.

How To Use InsideMENA’s Gratuity Calculator?

You don’t have to learn anything special to use our gratuity calculator. Here are some easy steps that you can follow to find out the total gratuity amount you will receive when you leave your job.

• First of all, enter the basic salary. Don’t add your dearness allowances and other benefits.
• Then, calculate your total duration of employment with the company and enter that in the required box. It should be more than one year.
• After that, you need to choose your contract type, whether it is a limited or an unlimited contract.
• Once, choose between Termination or Resignation options.
• Now click on the Calculate option to get the total gratuity amount you will receive.

Understanding the Calculation of Gratuity for Limited Contract

Even though you are working based on a limited contract, you can still get your gratuity. However, if you resign from the job before the expiry of your contract, your employer may impose a Labour ban, and you may also need to pay compensation. Here, the calculation of gratuity will be based on these rules.

• Less than one year work period- If you leave your job within one year of your service in the company, you can’t ask for a gratuity amount.
• One to Five years- You are entitled to receive your gratuity based on 21 days of salary for the total years you have worked.
• Five and More- You will get a gratuity of your 21-day salary for 5 years, along with a 30-day salary for every additional year.

Let’s understand this with an example.

If your basic salary is AED 10,000, then per day, you are getting 10,000/30= AED 300. Now, to calculate your gratuity amount, you need to multiply your per-day income by 30 or 21 based on your company policy, i.e., 300x21= AED 6300 or 300x30= AED 9000. This is the gratuity amount you will get for every service year.

However, it may be noted that the amount of gratuity of an employee working for five years and above should not cross the total salary of 2 years.

Understanding the Calculation of Gratuity for Unlimited Contract

Under such type of contract, there will be no certain period of years where you will have to work for the company. However, before leaving your job, you will have to submit a 1 to 3-month notice period. However, the calculation of gratuity for this type of contact will be based on the following rules.

• Less Than One Year- You will not get any gratuity pay.
• One to Three Years- You are entitled to earn 1/3 of your 21-day gratuity amount.
• Three to Five Years- You will get 2/3 of your 21-day gratuity pay.
• More Than Five Years- You will receive complete 21-day gratuity pay.

Let’s Understand This with An Example

If your basic monthly salary is AED 12,000, then your daily wage will be 12,000/30= AED 400. So, your 21-day salary will be 400x21= AED 8400. Now you can find your 1/3 or 2/3 of this to know your total gratuity pay for serviced years. If you have worked more than 5 years, you will get a full 21-day salary for every year.

Who Are Eligible to Receive for Gratuity In UAE?

In UAE, gratuity is not for all employees working for a company. Under the new UAE Labor Law, employees who have been working for a particular time period can claim their gratuity. If you want to know whether you can receive it or not, we would suggest you have a look at the below-listed points.

• In order to get a gratuity amount, there should be a valid employment contract fulfilling the rules mentioned in the UAE Labor law.
• As per the law, an employee needs to work for at least 1 year and above to receive a gratuity.
• The law says employees will get end-of-service benefits if they have served their organization for at least one year. However, if they resign from the job before the expiry of the contract and any notice period, they will not get any such benefit. However, if they can prove non-fulfilment of required obligations by the employer, they may receive a gratuity.
• In the case of death and disability, employees can get the gratuity, and the amount will be then given to the beneficiaries.
• Expatriates, as well as UAE nationals, are entitled to gratuity.
• Employees terminated under Article 120 due to non-compliance may not get the gratuity payment.

If you think you meet all these requirements, then you can use our gratuity calculator to know the estimated amount you will receive. Just follow the above-mentioned steps to get accurate results.

Some Benefits of Using InsideMENA’s Gratuity Calculator

The InsideMENA’s gratuity calculator is designed based on the necessary gratuity law and calculation methods. This is a completely automated tool that requires a few simple information to calculate gratuity, such as basic salary, job tenure or contract type. With this, you can have an idea about the total gratuity amount you will get after completing five years of service in an organization. Some other benefits that you will enjoy with our calculator are:

• Offers an easy way to calculate your gratuity.
• Our calculator is 100 percent free to use.
• It is fast and reliable.
• It helps save time as you don’t have to spend hours calculating your gratuity amount manually.
• You can access this calculator from anywhere and anytime you want.

When it comes to making better financial planning, you can use it to know the total amount you will get and then decide where you can invest that amount to earn better returns.

What If an Employer Refuses to Give Gratuity Benefits?

If you consider the latest UAE Labor law, it suggests the following things:

• All employers need to offer all types of end-of-service gratuity benefits to their employees within 10 to 14 days of the contract termination. If the employee doesn’t get his gratuity under that time period, he can raise a legal Labour complaint.
• Employers don’t have any right to terminate the contract without providing the employees with gratuity benefits.
• In unfortunate events, like the death of employees, the company should pay the gratuity amount to any family member of the deceased.
• Employers can’t deduct or reduce the gratuity amount considering the resignation date or type of contract unless approved by the law.

If the employer refuses to offer a gratuity, as an employee, you have the legal right to file a complaint against the employer at the Labour office. After that, the concerned department will then carry out the required legal procedure in the UAE Labour Court.

Forfeiture of Gratuity Entitlement

The UAE Labour Law says employees are not entitled to gratuity benefits if:

• The employment contract is terminated by the employee before the completion of one year of service.
• The employee is terminated by the employer for misconduct for any of the reasons mentioned in the UAE Labour Law’s Articles 88 and 120.
• The employee wants to opt for the company pension scheme and get a pension. This will be considered as an alternative to gratuity entitlement.
• The employee works under a limited employment contract with a validity of less than 5 years and leaves the work before the expiry of the contract.
• The employee is working under an unlimited employment contract but resigns without submitting any notice.
• The employees are GCC and UAE nationals and get a Social Security Authority Pension and a General Pension from the concerned home jurisdiction.

InsideMENA’s gratuity calculator is a useful tool for employees who are thinking of leaving their current jobs and want to know about the total gratuity amount they will get. Within a few seconds, you will get your results, and then you can come up with informed financial decisions to secure your future. Just don’t forget to enter the correct information to get the accurate results. The best part is that you don’t need to pay anything to use our calculator and you can even use it on your mobile phone. So, what are you waiting for? Now you know how to use it and the factors to consider before using it, give it a try now and calculate your gratuity amount now.