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UAE Labor Law Gratuity Formula:
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The UAE Labor Law End of Service Gratuity is a financial benefit provided to employees upon termination of their employment contract. It serves as a form of severance pay based on the employee's basic salary and years of service.
The calculator uses the UAE labor law gratuity formula:
Where:
Explanation: The formula calculates the end-of-service benefit by multiplying the basic salary by the years of service and applying the standard gratuity factor of 21/30.
Details: Accurate gratuity calculation is essential for both employers and employees to ensure fair compensation upon contract termination, compliance with UAE labor laws, and proper financial planning.
Tips: Enter basic salary in AED and years of service. All values must be valid (basic salary > 0, years of service > 0). The calculator will provide the gratuity amount in AED.
Q1: What is included in the basic salary for gratuity calculation?
A: Basic salary typically excludes allowances, bonuses, and other benefits. Only the fixed basic salary component is used for gratuity calculation.
Q2: Are part-time years considered in service calculation?
A: Only full-time continuous service is considered for gratuity calculation under standard UAE labor law provisions.
Q3: What happens if employment is terminated before completing one year?
A: Employees are generally not entitled to gratuity if they leave before completing one year of continuous service.
Q4: Are there different calculation methods for different service periods?
A: Yes, the calculation may vary for service periods less than 5 years and more than 5 years under certain conditions.
Q5: Is gratuity calculation the same across all UAE emirates?
A: While the basic principles are similar, there may be slight variations in implementation across different emirates and free zones.