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How To Calculate UAE Gratuity Pay - GulfNews
How To Calculate UAE Gratuity Pay - GulfNews
Click here for the UAE Labour Law clauses regarding gratuity pay.
Calculations for gratuity pay differ depending on whether youre on a Limited contract or
Unlimited contract.
Contract types
A limited or fixed term contract is where the employee agrees to stay with the company for a certain
number of years with a set end date. Resigning before the end of this period could mean one or all of these
a labour ban, loss of labour rights or even payment of compensation to the employer.
An unlimited contract has no such period clause or number of years, and therefore, has no end date.
However, a notice period of one to three months is applicable for termination of contract from either side.
Notes
Gratuity pay is calculated based on the most recent salary paid into your account. If you are terminated
from your job, unless you break the rules as stated in Article 139 of the Labour Law, the employee is still
entitled to gratuity pay.
Calculation example
Basic salary example: Dh10,000
b. 330.30 x 21 = 6,936.30. So 21-days salary is Dh6,936.30 in gratuity entitlement for each year of service.
Multiply this figure for every year of service up to 5 years.
c. 330.30 x 30 = Dh9,909. So 30-days salary is Dh9,909 in gratuity entitlement for each year of service so
long as the total figure does not exceed two years total salary figure.
Calculation example
Basic salary example: Dh10,000
Of this figure of Dh6,936,30, only 1/3 is payable if you have worked between 1 and 3 years, so the total
gratuity pay would be Dh2,312.10.
Only 2/3 is payable if you have worked between 3 and 5 years, so the total gratuity pay would be
Dh4,624.20.
These calculations are not to be treated as law, they are for your reference only. For any disputes or further
clarification, contact the UAE Ministry of Human Resources and Emiratisation.
Formula
1. Monthly salary 30 = Daily wage