UAE Gratuity Calculation 2023 as per Labour Law
Gratuity Calculator UAE 2023 is now available
on our blog, employees working in LLC companies or free zone companies
can easily calculate UAE gratuity 2023 as per UAE Labour Law on our blog
by following below given UAE Gratuity Formula.
How to Calculate Gratuity in UAE:
To Calculate UAE Gratuity online with Formula Click Below Link
If you are planning
to leave job or looking to change company in 2022, we got you covered with
simple guide on How to Calculate Gratuity as per UAE Labour Law in 2023.
Gratuity Calculator Online for LLC companies:
The official website
to calculate your gratuity for LLC company is given below, please read our full
article before using calculator.
Gratuity Calculator Online for Free Zone Companies:
Gratuity
Calculator for Free Zone companies online is also available, check out below
link to visit official website to calculate your Gratuity online, before
calculation please read full article on how to calculate gratuity in UAE as
per Labour Law.
As per visitors’
queries, we came to know that some of UAE expats (workers) are unaware of
latest gratuity rules in uae, so we have decided to write the latest UAE
gratuity rules for 2022 in this article which will guide you throughout the
process.
Gratuity Calculator UAE for Domestic Workers:
Ministry of Human Resources and Emiritization has announced that domestic workers are eligible for gratuity as per UAE Labour Law for 14 days salary per year, to read more about gratuity for housemaids in UAE, Click below LinkImportant point before calculating Gratuity:
The most
important point before calculation is to know your contract type, if it is
Limited or Unlimited? Because gratuity is depending up to your contract type
and is based on the reason for end of service either it is Resignation or
Termination?
Difference between Resignation and Termination in UAE?
Resignation means
if employee (worker) quit or leave a job before completing contract while
Termination means where company (employer) terminate an Employee (worker) or
cancel his/her employment contract.
Gratuity will always be calculating by basic salary of
worker and shall not include any benefits provided by company such as housing, transport etc.
GRATUITY
CALCULATION FOR UNLIMITED CONTRACT
Gratuity for Less than 1 Year of Service:
As per UAE LABOUR
Law Article 132, Section 2, if worker Resigns with less than a year of service,
he/she will not get any gratuity.
Please keep in
mind that gratuity is only applicable when an employee completes 1 year of
service with a company.
Gratuity for more than 1 & Less than 3 Years of Service:
If worker Resigns
and he/she worked between 1-3 Years he/she should take 1/3rd of 21 days of
basic salary for each year of employment.
Gratuity for more than 3 & Less than 5 Years of Service:
If worker Resigns
and he/she worked for more than 3 years but less than 5 years, he/she should
take 2/3rd of 21 days for each year he/she worked.
Gratuity for more than 5 Years of Service:
If worker is Resigning
under Unlimited Contract after 5 years of continue service, the worker should
take 21 days basic salary for every year he/she worked and the 30 days basic salary
for additional years after completing 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 his/her service.
GRATUITY
CALCULATION FOR LIMITED CONTRACT
Gratuity for
Limited Contracts are little bit different from Unlimited Contracts.
1/3rd and 2/3rd
system does not apply under limited contract.
Gratuity without Completing Limited 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 limited period contract for 2 years but resigned after 6
months, 12 months or 14 months, company will do not pay any gratuity to that
worker.
Gratuity for 1-5 Years of Service:
If you have
completed 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.
Gratuity for 5+ Years of Service:
If you have
completed 5 years of continuous service with your company and have resigned,
then for the first 5 years of work you are eligible for 21 days’ 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 Company and you have not completed your 1 year yet, you
will not eligible for any gratuity, but if you worked with the company for more
than 1 year and less than 3 years, you will get 30 days of basic salary for No.
of years your served before termination.
Frequently
Asked Questions about UAE Gratuity Calculation 2022
Q: Can company
deduct any payment from the gratuity payable to the worker?
Yes, the company
(employer) may deduct any amount due and payable to the employee (worker) to
the employer (company) from his/her gratuity payment and pay for the balance to
the employee.
If there is any
dispute between worker and company for gratuity payment or amount payable to
the company, such case should be put to the Labour office (MOHRE/free zone) for
investigation.
Q: Shall an
employee be entitled to gratuity if he/she died?
Yes, in the event
of a worker’s death, the employer (company) must pay the end-of-service
gratuity to employee beneficiaries (heirs).
Q: What is the
maximum Gratuity that we can get?
As per UAE LABOUR
LAW, Article 132, maximum gratuity amount for employee cannot exceed 2 years’
gross salary.
Q: What is the
worker entitled to at the termination of his/her contract?
The worker
(employee) at the termination of his/her employment contract will be entitled
for to the following:
1: A notice
period, or any amount due in lieu of the notice period, only in case of
unlimited contract.
2: Compensation
(payment/reward) for the unreasonable dismissal if the contract was terminated
by the company (employer) for unreasonable cause, only in-case of unlimited
contract.
3: If employee is
working under limited contract, compensation equivalent to the period until the
end of the contract, or three month's salary whichever is greater.
4: Payments
equivalent to the balance of unutilized leave or any part thereof.
5: Payments for
overtime or any other pending balance or salary.
6: End of service
benefits, gratuity.
Q: Can 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 compensations.
Q: What does
gratuity mean in terms of compensation?
An employee who completes
1 year or more in continuous service shall be entitled to gratuity at the end
of the his/her service.
The gratuity
shall be calculated as follows:
1: 21 day's wages
for each year of the first 5 years.
2: 30 day's wages
for each additional year after 5 years on condition that the total of the
gratuity shall not exceed the wages of 2 years.
Q: Will absence
be calculated in Gratuity?
The day of
absence from work without pay shall not be included in calculating the time
period of service. However, if the employee (worker) completed 1 year in
service he/she will be entitled to a gratuity for the fraction of the year
proportional for the part of the year he spent in company if he has completed 1
year in continuous service.
Q: Explain End of
Service Benefits (Gratuity) in simple words:
1: If the worker
resigns of his or her own free will (resignation) before completing 1 year,
then they will not be entitled to any gratuity pay.
2: Worker
(employee) is entitled to a gratuity for the served fraction of a year, if he
completes 1 year of continuous service.
3: The End of
Service Gratuity will calculate based on last salary which the employee
(worker) was entitled to, namely the basic salary. But it will not include
allowances such as Accommodation, conveyance, utilities, furniture etc.
4: If the
employee (worker) owes any money (loan, advance salary) to the company
(employer), the company may deduct the amount from the employee's gratuity.
The guide about UAE
Gratuity calculation 2023 as per UAE Labour Law ends here, feel free to ask
your questions in below comment box regarding Unlimited Contract Gratuity or
Limited Contract Gratuity.
Hello,
ReplyDeleteI am teacher in a private school.
I depend of the ministry of education in my country that allowed me or no to work in a stranger school.
I had a three year contract that I terminated last year abd I asked my ministery to give me one more year that will finished in 2019.
In the school I work, I have an unlimited "local" contract. My question is, shall my gratuity pay will be caculated with 2 third of 21 days for 4 years or 4 times 21 days
Thank you.
Hello
ReplyDeleteI am teacher in a private school but I need agreement of my ministery of my country so I could say I have 2 contract.
I had a 3 years contract from my ministery but I signed an unlimited contract in the school I work. Then last year I had a new one year contract of my ministery in my country and then I signed a knew unlimited contract in the school I work.
My question is, how will be calculated my gratuity pay as I only have unlimited contract in the school I work ruling by uae rules. 2 third of 21 days for 4 years or 21 days for 4 years
Thank you.
Hello
ReplyDeleteI am teacher in a private school but I need agreement of my ministery of my country so I could say I have 2 contract.
I had a 3 years contract from my ministery but I signed an unlimited contract in the school I work. Then last year I had a new one year contract of my ministery in my country and then I signed a knew unlimited contract in the school I work.
My question is, how will be calculated my gratuity pay as I only have unlimited contract in the school I work ruling by uae rules. 2 third of 21 days for 4 years or 21 days for 4 years
Thank you.
How about more than 12years but not same imployers still I can avail the gratuity
ReplyDeleteMy question is this,
ReplyDelete1. Can an employee collect gratuity immediately after two years contract finish or not.
2. Can employee leave the company after complete of two years contract and look for another job dew to the misuse of employee without any effect or penalty.
good day i what to ask because so confused,i work 4 yrs and my basic salary 800 but im not go home in 4year becouse i can't go vacations becouse of my work.can i get cash money in roundtrip ticket 2x in my employer becouse im not vacation in 4 yrs then eccept that how much i can get my gratuity in 4 yrs thx u
ReplyDeletegood day i what to ask because so confused,i work 4 yrs and my basic salary 800 but im not go home in 4year becouse i can't go vacations becouse of my work.can i get cash money in roundtrip ticket 2x in my employer becouse im not vacation in 4 yrs then eccept that how much i can get my gratuity in 4 yrs thx u
ReplyDeletegood day is household workers are intitled for gratuity?i work for 9 years in employers and it seem im gonna work longer with them
ReplyDeleteIam under by unlimited but my company keep telling is just 14dys not 21dys,wich one is we need to follow.anyone please can answer
ReplyDeleteWhy not full salary as a gratuity after finishing job with company. 21 days basic salary is totally different than expected salary. Review please less than one acceptable but let the employee to gain something
ReplyDeleteIm working in a saloon for 7yrs now but they never change my basic salary in a contract,but they gave me increment certicate... can i use that increment cerficate on gratuity calculation??
ReplyDeleteIm working in the same salon for 7 yrs now but they never change my basic salary,the company gave me an increment certificate instead, do can i calculate my gratuity base on the increment certificate???pls i need an answer
ReplyDeleteIf my basic salary was changed last month and if i resign next month, which basic salary will be calculated for gratuity.
ReplyDeleteMy case is little complicated as I am working in oil field company. I have a total working experience in the same company for 12 years. Now as part of restructuring of the Company, they are releasing people.
ReplyDeleteI joined the company in the year 19.Aug.2007. They paid the partial payment of the gratuity in the year 2011. After that i was moved to various countries where i had the UAE Visa till Aug 2013. All this time i was working with the same company.
I was back in UAE in 2015 and till now i have accrued total of 3.62 years after coming back till the release date which is 31-Mar-2019.
Now the company is saying that i am eligible for payment from 2011 to Aug 2013 with the base payment as per the contract at that time (and not with the last base payment calculation). And for the last 3.62 years with 21 days of base pay even if i am with the same company for the 12 years (not 30 days of calculation).
So please guide me regarding the gratuity calculation for the period as stated above.
Looking forward to your response.
UAE Labour Law
ReplyDeleteHi. I already have 3 consecutive warning letter and was threathened to be terminated if i get warning letter again ? And i think i did a mistake again that is possible to get warning letter again that would lead me to termination. Im under unlimited contract. What do u think should I do ? Should i wait for my termination or resign before they terminate me. Please answer my question. ASAP thank you.
ReplyDeleteHi, my contract is expiring on May/31/2019 and PRO took my signature on a paper mentioned "I will not renew my contract", on May/25/2019 and gave me salary with gratuity.
ReplyDeleteNow I don't understand how he calculated gratuity, he calculated it on 14 days but it should be on 21 days, it has been 4 years of my service. He gave me gratuity AED 1866 but I believe it should be AED 2800.
1. Contract Type: Limited (2 years contract for 2 times)
2. Period: June/15/2015 to May/23/2019 (4 years)
3. Reason for end of service: Contract expired (Did not renew contract on completion)
4. Basic Salary: 1000
Please help me find out if he calculated correct of he played with me.
Will a Nanny or domestic helper entitled to have gratuity???
ReplyDeleteI am a Nanny for almost 7 yrs now in 1 family... Praying to have it....
Dear Sir,
ReplyDeleteon expiry of contract, company don't want to renew employment contract - it mean termination of contract or non renewal of contract.
Hello.
ReplyDeleteDoes the Domestic Helpers/ Nannies have a gratuity pay?I work for 1employer for almost 16 years.
Hoping for the reply.
Does a domestic helpers Nannies/housemaids have a gratuity pay?I've been working almost 16 years in 1 employer.Hoping for your response..
ReplyDeleteMy employer is not calculating the gratuity using the formula above. They are working out a yearly salary and dividing by 365. Then they multiply by number of days worked. They are working out some kind of a gratuity rate. This is also not leading up to 2 years because we were instructed to hand in our notice of non-renewal of contract.
ReplyDeleteDoes a domestic helpers Nannies/household workers can avail gratuity pay?I work for almost 16 years in 1 employer.Hoping for your reply..
ReplyDeleteHi Sir there a gratuity also for house maid
ReplyDeleteHi Sir is there a gratuity also for house maid
ReplyDeleteyes, visit our new website for details about gratuity for housemaids in uae
Deletelink: uaelabours.com
Ive completed just over 2 years and fallen ill while on vacation i have since been grounded not being able to travel back to the UAE. My company has however terminated my services as absconded but ive been in contact with my HR department since ive fallen ill. What happens to my gratuity funds that i should get? I have appealed against the matter however they have continued with the termination of my services
ReplyDeleteGood day i have fallen ill after completing just over two years of service in the UAE, i came to my home country on vacation and was grounded to travel. My company have now terminated my services saying its absconding however i have been in contact with HR sending them all the hospital and Dr's notes since ive fallen ill. I have appealed against the matter of which they decided to continue with the termination. My question remains what happens with my gratuity funds.
ReplyDeleteHi, I have a question, my contract date as on the paper is from July 3, 2017 to July 2, 2019. The company let us start to work from August 1, 2017. Now, the company is not paying us the gratuity because they said we did not finsih 2 years because we started August 1, 2017. Is it right?
ReplyDeleteI already cancelled.but my boss he didn’t pay my 6 years and my ticket..I need a help please
ReplyDeleteHouse maid can avail this Gratuity law?
ReplyDeleteHi
ReplyDeleteI have a question? How can you compute the graduity for the limited contract? Can you please tell me how to know this issue?
And can you give the formula for how to compute?
Thanks
Sir were I complain if my employer not give my gratuity...
ReplyDeleteNice blog and your calculator content is good.
ReplyDeletenika-talana
Hi,I just want to ask,
ReplyDeleteMy contract will finish this November,but my visa in the company will finish January 2021,can I go resign? Earier to my contract?I'll pay anything to my employer?please answer thank you
Is anyone, without ending the unlimited contract, who has completed 3 years of service, allowed to take full or part gratuity?
ReplyDelete