Gratuity Calculator UAE

Welcome to SMEs Calculator, your ultimate destination for navigating the complexities of financial calculations in the UAE. Today, we’re introducing our meticulously designed Gratuity Calculator, crafted specifically to serve employees and employers under the UAE Labour Laws. This tool is your first step toward understanding your end-of-service benefits without the complexities of manual computations.

Why Use the SMEs Gratuity Calculator?

Gratuity pay, often known as end-of-service benefits, is a crucial element of employment compensation in the UAE, rewarding long-term service. However, calculating this benefit can be confusing due to the nuances of labor laws. Our Gratuity Calculator simplifies this process, providing you with a quick, reliable, and easy-to-understand resource to estimate your legal entitlements upon ending employment.

Disclaimer

Before proceeding, please note that our Gratuity Calculator is designed for guidance purposes only and does not substitute for professional legal advice. The results generated are based on typical scenarios under the UAE Labour Laws and do not encompass all possible employment circumstances. For precise legal advice regarding gratuity or any disputes related to end-of-service benefits, consulting with a professional is recommended.

How the Gratuity Calculator Works

Our Gratuity Calculator is an intuitive tool that makes calculating your end-of-service benefits straightforward. To ensure accuracy, you’ll need to input the following details:

1. Type of Contract: Specify if your contract is limited or unlimited, as the calculations differ.
2. Last Basic Salary: Input your last basic salary, which will be the basis for the gratuity calculation. Note that allowances such as housing, travel, and education are not included.
3. Duration of Employment: Total duration of your employment in years and months.

Understanding the Types of Employment Contracts in the UAE

The UAE Labour Law distinguishes between two types of employment contracts: limited and unlimited. Each type influences your gratuity calculation:

• Limited Contract: This contract is for a specified duration. If you complete the term of the contract, your gratuity is calculated based on the entire period of engagement.
• Unlimited Contract: This contract does not have an end date and can be terminated by either party given proper notice and justification. Gratuity calculations here vary based on the terms of resignation or termination.

Detailed Gratuity Calculations

For Unlimited Contracts

Resignation:

• Less than 1 year: No gratuity pay.
• 1 to 3 years: Entitled to 1/3 of 21 days’ basic salary for each year of service.
• 3 to 5 years: Entitled to 2/3 of 21 days’ basic salary for each year.
• More than 5 years: Full gratuity pay of 21 days’ basic salary for the first 5 years and 30 days for each subsequent year.

Termination:

• Less than 1 year: No gratuity pay.
• More than 1 year and less than 5 years: 21 days’ basic salary per year.
• More than 5 years: 21 days’ basic salary for the first 5 years and 30 days for each year thereafter.

For Limited Contracts

• Less than 1 year: No gratuity pay.
• 1 to 5 years: 21 days’ basic salary per year.
• More than 5 years: 21 days for the first 5 years and 30 days for each additional year.

Limitations and Maximum Entitlements

The total gratuity should not exceed two years’ basic salary. It’s important to note that if there are absences without pay, those periods may not be counted in the total period of service.

Enhancing Your Understanding

To better understand how the gratuity is calculated, you can experiment with different scenarios using our calculator. This hands-on approach helps you visualize how various factors affect your end-of-service benefits.

Conclusion

At SMEs Calculator, we strive to provide tools that empower you to make informed financial decisions. Our Gratuity Calculator is just one example of our commitment to offering comprehensive, easy-to-use resources tailored to the needs of the UAE workforce.

Thank you for choosing SMEs Calculator. Plan wisely and calculate your future today!