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UAE Gratuity System as per Labour Law

Calculation of UAE Gratuity, Dubai Companies Gratuity amount, End of Service Gratuity Amount, Gratuity Calculation as per UAE Labour Law, UAE Law


Asalm-oa-Likum, Hello & Marhaba 
We are Receiving Questions that some employees have not given what they was estimated, and most of employees even do not know the calculation process.
This Article contains the full process of Gratuity Calculation as per UAE Labour Law 2016.


Before beginning to Article please note that the Gratuity calculation is based on Resignation and Termination and will only be calculate by BASIC SALARY.
Resignation means if employee quit a job before completing contract while Termination means where company terminate an Employee or Worker. 



GRATUITY FOR UNLIMITED CONTRACTS:

Less than 1 Year:
As per UAE LABOUR Law Article 132, Section 2, if worker Resigns with less than a year of service, he will not get any gratuity.
Gratuity is only applicable when an employee completes one year of service with  a company.

More than 1 & Less than 3 Years:
If worker Resigns and he worked between 1-3 Years he should take  1/3rd of 21 days of basic salary for each year of employment.

More than 3 & Less than 5 Years:
If worker Resigns and he work more than 3 but less than 5 years, he should take 2/3rd 21 days for every year of worked.

More than 5 Years:
Resignation under Unlimited Contract after 5 years, worker should take 21 days basic salary for every year he/she worked and 30 days basic salary for additional years.  (if work with same company above 5 years) 

What if Company Terminates the Employee?
In case of Unlimited contract where the company terminates the worker, 21 days of wages from minimum 1 and maximum 5 years should be paid to Employee, If employee worked for more than 5 years, he/she will be eligible for 30 Days of Basic wage for each year of worked.



GRATUITY FOR LIMITED CONTRACTS:

Gratuity for Limited Contracts are slightly different from Unlimited Contracts.
1/3rd and 2/3rd system does not apply under limited contract.


Without Completing Contract:
It is clearly mentioned in UAE LABOUR Law Article 138 that If employee have not completed his/her Limited Contract period as signed in Agreement, he/she will not be eligible for any Gratuity.
In simple words, if someone signed a contract for 2 years but resigned after 14 months, company will do not pay any gratuity to that worker.

1-5 Years:
If you have accomplished your limited contract and it is within 1 to 5 years, you are entitled for 21 day’s basic salary wage for every single year of work.

More than 5 Years:
If you have completed years of continuous service with your company and have resigned contract, then for the first 5 years of work you are eligible for 21 day’s basic wage & for the service above 5 years, you will get paid 30 day’s basic wage for every year of service.

What if Company Terminates the Employee under Limited Contract?
In case you have been terminated by your Employer or Company and you have not completed your 1 year yet, you will not eligible for any gratuity, but if worked with the company for more than 1 year and less than 3 years, you will get 30 day’s of basic salary for No. of years your served before termination.

FAQ’s:
Q: What is the maximum Gratuity that we can get?
As per UAE LABOUR LAW, Article 132, maximum gratuity amount for employee can not exceed 2 years’ gross salary.

Q: Do I get 3 month salary in case of termination?
Yes, if you are terminated for reason other than mentioned in UAE LABOUR LAW Article 120, you are eligible for 3 month’s compensation.

Q: I am Terminated due to Misrepresentation of guests sanctification survey, Company said "You have violated company value and ethics, am i eligible for Gratuity?
No, You are not Entitled for any Gratuity,  as per Labour Law "Violator of Company  Legal Policies and Procedures will not get any thing".

Q: When to collect Gratuity Amount from Company, Before Cancellation or After?
You have to collect your Gratuity Amount Before Cancellation of Visa and Labour Card, as Employee will require to sign a document that mention "U have received all dues from my Company", once you signed, Cancellation process will begin.


For more FAQ’s please Leave Your Comments Below, You will get Answer soon.

Thank you For Your Time

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42 comments:

  1. Hello there! I am working with this company for 7 yrs and 10 months. And my salary 2,150dhs. And im i unlimited contract. Do u think how much my gratuity is? Wairing for ur response. Thank u and more power.

    ReplyDelete
    Replies
    1. Fast 5years =105 days
      Next 2 years =60 days
      10 month = 25 days
      Your total gratuities should be =190 days salary

      Delete
  2. Hello. My company provides me free accomodation and transportation, it is clearly written in my offer letter that I will get full basic salary, but when I received my contract it is divided to basic salary, housing allowance and transport allowance. How will this affect my end of service benefits and how I can be able to correct it? Can I file a complaint about this?

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  3. Hi if we are working more than 3 years and i plan to resign 6 months before completed 4 years so what i have to get from the company?i limited contract every 2 years.

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  4. Can I ask...which salary using to compute?!! The starting or present salary....my starting is 900 n my present salary now is1500 for my contract will be finish next yr n it will completed 7 yrs......how much do u think I can have for my gratuity?

    ReplyDelete
    Replies
    1. The latest basic salary will be the basis for gratuity calculation.if the 1500 you stated is full basic salary, then that is the basis for calculation. 7 years mean you are eligible for 165 days gratuity ( 125 days for the first 5 years and 60 days for the additional 2 years). In dirhams, you should get : 1500 dirhams per month x 12 months / 365days x 165 days = 8136.986 dirhams

      Delete
    2. Sorry 105 for the first 5 years and 60 for the additional 2 years. That is why you are eligible for 165 days

      Delete
  5. Hi the unlimited contract 1/3rd gratuity with respect of basic also effective on the security companies.

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  6. Hi the unlimited contract 1/3rd gratuity with respect of basic also effective on the security companies.

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  7. What about a lady working on husband's visa in the same company on limited contracts since 8 yrs? How is the calculation done?

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  8. I am employed by an Abu Dhabi government organization under temporary contract. Within our contract it states that "we are not entitled to end-of-service gratuity". Is this correct? I have read the UAE Labor Law regarding gratuity payments but could not find any information stating that an employment contract supersede the UAE Labor Law.

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  9. please advice me. i am planning to resign to my work im working 3yrs7months on my company.i just want to ask if i can get the holidays they didnt pay,my half day off,and the extra hours they didnt pay.can i get this in cash?plus my graduity?pls reply.than you

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  10. Hi good afternoon ... May I know for about as a nanny or house hold workers are we capable for this gratuity and thanks for your response ...

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  11. Good day..I worked for 4 years and 24 days with an unlimited contract and I decide to resign..I have free accomodation and free transportation..my basic salary is 1595..the company calculate my gratuity by 60percent from my basic salary I just want to know If that is based on the labour law?
    Thank you and hoping for an answer.

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  12. In addition to my inquiry I also wanted to know with regards to my vacation leave..I am eligible for 120days coz I finish 4 years and I just took 54 days so what about the remaining days is it nya right to get a payment by cash out of it?
    Thanks

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  13. how about those who work as domestic helpers...do they recieve also gratuity after finishing the contract...

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  14. What if the company is not giving salary for almost five months,and am working for more than 3 years i want to transfer another company what is the calculation of my gratuity

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  15. Thanks for the info.. when this new rule take effect? Jan 2016?

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  16. i am a housemaid n was terminated wdout any reason..my previous employer only gave me 1 mntn..ds was happened last july of ds year..can i still claim d additiinal 2 mnths??am still here n dubai near my previous employers house.

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  17. Hi ive work in my company for 5years and company closed our department.how much graduity i will recieved?

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  18. Hi i just wanna ask if i finish my contract how much my gratuity my contract is unlimited

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  19. My salary is 2500, but my basic is 900. I'm limited contract and I've been working 5years in the same company. I'm planning to resign before my 6years. How will be the computation of my gratuity? Am I getting full gratuity because of working more than 5years? Thank you for your kind response.

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  20. do housemaid and nannies are entitled of gratuity? are we included in this rule?or this applies only for skilled workers,,thanks

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  21. Hi im working 2yrs and unlimited contract,my basic salary is 1,200,do you think how much my gratuity?

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  22. Hello. I've been working in my present company now for 4 years & the 1st contract was unlimited which I completed by 3 years already. Now the 2nd contract is limited & already 1 year finished & I want to resign but unfortunately our company said that I will get nothing if I will not complete the limited. How is that true if I had already completed a separate unlimited contract? at least I could get some gratuity. Thanks.

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  23. Hi, good day! I'm working in a company for almost 10 years and my limited contract ended next year. My basic salary in my contract stated is only dhs 5oo however, I'm receiving dhs 3,500 monthly salary as of now. How much gratuity do I have to receive when my contract ended? Hoping for your kind response. Thank you!

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  24. Im 6years in the company and my salary is 2500 im free accommodation and food can you compute my graduty

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  25. hi. im working for 3 years 3 months in my company with unlimited contract. im planning to resign by december. i am eligible for how many days basic salary?

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  26. Hi I'm as well is unlimited contract under my company. my basic salary since is 1,200aed im going 6 years next 2017, how much will be my compensation .thanks.

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  27. Hi I'm working with my employer for 12 years this year but we just move to dubai two years ago How does it counts for a graduity?does living in Singapore before counts?thanks

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  28. My name is Cate kiko from United State ; i am a single mother with just one son. My husband divorces me when my little boy was still 3years old. And ever since then things has not been easy for me and my little boy. Even to pay my bills is a big problem for me, I continued praying to the lord of heaven to send down my divine helper for me one day, who can be able to remove shame and frustration away from my life. Until one day i came across a loan firm, TNA LOAN COMPANY on yahoo answer who share a testimony about one Mr. Abdulrahman Nunu who grant her a loan of $50,000USD with just 3%. So i decide to try my faith because i have been scammed 2 times. So I took bold step I contacted is official website and read more about is firm, then I applied and my loan of $30,000USD was approved.
    I told him if only he can help me i will tell the whole world about the good he has done for me. Indeed is really a genuine lender. Contact him now for help via Email: saintkassimsamiufund@gmail.com

    ReplyDelete
  29. Dear UAE Labour Law:
    I joined the company since September 2005 as as Administrative Assistant. My visa is Archive Clerk currently. If Im not mistaken, in 2009 we were covered by a national salary increment in UAE (Thanks!). In 2012, they changed my title to Executive Secretary. I have vacation leave every year as per written in my contract, BUT the company never pay one month annual leave days plus my regular monthly salary.
    1st question: If I resign, can I get these annual leave days to be paid to me including my gratuity. Incase they refused, what action can be done? and how long will it take?
    2nd question: How can I request a 1 month paid annual leave and my monthly salary from 2005 to 2016 without hassle from my company? I don't think any company does pay for annual leave plus regular salary. Anybody can help me for this please.
    3rd question: Our salary has been delayed many times for two years now. Last July 2016 salary, we received it on August 21, that's annoying! The September salary is still not received upto this time, 10th of October 2016. Any action with this kind of employer/company?. Please advise.

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  30. at completion of contract 2 years resignation is necessary for cancellation.

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  31. I appreciate that you shared information in regard of labour law.

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  32. Hi sir/mam..i have a question.. can we get a graduaty if our employeer cancelled the worker even notyet finish contract in 2 years

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  33. This comment has been removed by the author.

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  34. Hi sir/mam What about gratuity more then 10 years working same company plz reply.....?

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  35. This comment has been removed by the author.

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  36. I have a plan to resign after a period of 5years and 8 month and my basic salary being 1200 ead, i would like to know how much i will get as my gratuity

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  37. I terminated my employment with previous company in the UAE via resignation.
    The company withheld information regarding negative days since joining the company (I was not aware of this) then when I asked about my end of service gratuity they said that it won't be paid because I owe the the company over $10000 which I did not. I have since had written confirmation that I do not owe any money however they are still refusing to pay this gratuity. It's been months now with no communication from them and although am sure they will be closing my visa by proxy as I have not signed anything. I need to know if I have any legal rights to peruse and challenge this.
    I worked for the company for over 3rs and I'm now back working in the U.K full time.

    Also if my visa has been closed can this still be challenged, I have been treat very badly for resigning and it's not been a very pleasant exit process.

    ReplyDelete
  38. Hello Good Day everyone I will end my service for 7 years and 8 months soon and im under unlimited contract with a basic salary of 800 aed. Can anyone help me how on much gratuity pay will I be receiving thank you.

    ReplyDelete

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