Gratuity Calculation Rules in UAE Labour Laws

Gratuity are end of service benefits usually a sum of money paid to employee. There were several rule implies for calculation of gratuity. Employee must know the calculation of the gratuity as this help employee to identify any error made by company.
UAE labour law article 137 define the end of service(gratuity) with amount, calculation rules. It is important that you read these laws set out by ministry of labour. Gratuity calculation is based on most recent wage pay by your company.

Notice that these calculations of gratuity were depend on whether you’re on a limited contract or of unlimited contract. If you follow the rules stated in article 139 of the labour law and terminated from your job than you’re entitled for gratuity pay. If the worker resigns before 1 year on his own than he/she will no be entitled from gratuity pay.

Rule No.1 Termination or Resignation with one year have no Gratuity
Rule No.2 Gratuity is calculated on the basis of last basic Salary
Rule No.3 Gratuity at 21 days of Basic salary for each year of his/her service.

Rule No.4 Gratuity when Service between 1 to 5 years on limited contract

Employee/worker is entitled to full gratuity pay based on 21 days salary for each year of service

Rule No.5 Gratuity when Service of 5 or more on limited contract

Employee is entitled to full gratuity pay based on 30 days salary for each year of service

Rule No.6 Service between 1 year to 3 years on unlimited contract
Employee is entitled to one third (1/3) of the 21-days gratuity pay.

Rule No. 7 Service between 3 years to 5 years on unlimited contract
Employee is entitled to one third (2/3) of the 21-days gratuity pay.

Rule No.8 Service of more than 5 years on unlimited contract
Employee is entitled to full 21-days gratuity pay.

These rule might look complex as labour laws are not easy to understand for normal employee In case you don’t understand don’t hesitate to comment below with your basic salary and number of years of service with type of contract you have. Our team tries its best to calculate gratuity applicable to you in UAE. Just give one share to us against our service.