UAE Gratuity Change: How to Calculate Your End Of Service in the UAE

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End-of-service gratuity rules have been updated.

But the process is still easy and straightforward to calculate. The Dubai Development Authority created a gratuity calculator to help you figure out what your payout will be as per the UAE labour law, which requires you to fill in your start and end dates, as well as your basic salary.

Essentially, the big change announced by the UAE Ministry of Human Resources and Emiratisation (MoHRE) is that unpaid leave days would not be included in the final calculation of gratuity.

What you need to know about UAE gratuity

Using your basic salary (before allowances are added on), you will receive a 21-day salary payment for the first five years of service.

Those who have been working in the same company for more than five years will get 30 days’ worth of their basic for every year past the first five.

That said, after this week’s update, unpaid leave days will be taken off this final total.

The end-of-service gratuity is calculated on the basis of the last basic salary to which you are entitled. It will not include allowances such as housing, conveyance, utilities, furniture etc.

First step: Figure out what contract type you are

According to the UAE Labour Law, they take two types of contracts into consideration when calculating your gratuity.

  1. Limited-term contract
  2. Unlimited term contract

In general, limited-term contracts include the start and end dates of the working period. Unless the contract is purposefully renewed, it will be automatically cancelled when it expires. Think of project workers, who leave the workplace, once the project is complete. While an unlimited-term contract is more flexible and the one more commonly used in the UAE.

When will I not get gratuity?

If you, as an employee, resign of your own free will before completing one full year of work, then you will not be entitled to any gratuity pay.

Source: Timeout Dubai

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