The UAE labor law offers a generous reward for dedicated service: end-of-service benefits, or Gratuity! This valuable benefit kicks in after just one year of loyal employment and grows steadily with experience.
Here’s how it works:
Every year you commit, you earn 21 days’ worth of your final salary in Gratuity, up to your fifth year.
After five years of dedication, your reward increases to 30 days’ salary for each additional year you serve.
Remember, absences without pay don’t count towards your service time, and your employer can deduct any outstanding debts from your final Gratuity payment. It’s a fair and transparent system that recognizes your hard work and commitment.
Gratuity in Dubai UAE:
In the United Arab Emirates and Dubai, your commitment thrives! After just one year of service, you earn the right to a unique appreciation called “Gratuity” (مكافأة). This fantastic reward grows with your loyalty, acknowledging your dedication and adding a financial flourish to your journey.
Eligibility Criteria for Gratuity in Dubai UAE:
To be eligible for gratuity, the following conditions must be met:
The employee should have a tenure of more than one year with the company.
Continuous service in the organization for a period exceeding one year is a prerequisite.
The employee must voluntarily resign from their position.
In cases where an employee departs the organization before the contract concludes, they are not eligible for gratuity.
Both UAE nationals and expatriates are entitled to gratuity benefits.
How is gratuity calculated manually in Dubai UAE?
Certainly, individuals have the option to manually calculate their gratuity or utilize a gratuity calculator tailored for the UAE. A straightforward method involves multiplying the daily wage by either 21 or 30, depending on the duration of service within the company. For instance, with a daily wage of 333.30, the calculation would be 333.30 x 21, resulting in 6,999.30. This approach offers a practical way to determine gratuity entitlements.
Crucial Factors for Gratuity Calculation:
1. Type of Contract: In the UAE, employment contracts are primarily of two types: limited and unlimited. Each type has distinct rules for gratuity calculation, detailed below.
2. Last Basic Salary: The basis for gratuity calculation is the last basic salary. However, bonuses and allowances such as housing, conveyance, overtime, and others should not be included.
3. Duration of Employment: A minimum of one year of completed employment is necessary to be eligible for gratuity.
4. Continuous Employment: Gratuity computation is based on continuous employment. Absences without pay during the service period are not considered in the calculation.