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UAE End of Service Benefit Formula:
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The UAE End of Service Benefit is a statutory entitlement for employees in the United Arab Emirates, comprising gratuity payment and leave encashment. It is calculated based on the employee's final salary and years of service according to UAE labor law.
The calculator uses the simple formula:
Where:
Explanation: The total benefit is the sum of gratuity payment (calculated based on basic salary and service years) and leave encashment (calculated based on daily wage and unused leave days).
Details: Accurate calculation of end of service benefits is crucial for both employers and employees to ensure compliance with UAE labor law and fair compensation upon employment termination.
Tips: Enter gratuity amount and leave encashment amount in AED. Both values must be non-negative numbers. The calculator will sum both amounts to provide the total benefit.
Q1: How is gratuity calculated under UAE law?
A: Gratuity is typically 21 days' basic salary for each year of service for the first 5 years, and 30 days' basic salary for each subsequent year.
Q2: What is included in leave encashment?
A: Leave encashment includes payment for all unused annual leave days based on the employee's final basic salary.
Q3: When is end of service benefit payable?
A: End of service benefits are payable upon termination of employment, regardless of whether the termination is by employer or employee.
Q4: Are there different rules for different employment types?
A: Yes, calculation methods may vary between limited and unlimited contracts, and between resignation and termination cases.
Q5: What happens if employment is terminated during probation?
A: Employees terminated during probation period may not be entitled to end of service benefits unless specified in the employment contract.