Thinking about quitting your job in the UAE? If so, you’re likely wondering about your gratuity payout. Here’s everything you need to know about end-of-service benefits before resigning from your job in the UAE.
You can calculate your gratuity using our online tool.
Service summary
Gratuity breakdown
What Is Gratuity?
Gratuity is basically a service that is used for payment given to an employee by their employer in the UAE when they end their employment or resign from the service. If you are an employee of any company in the UAE, you must complete one year of service to be eligible.
This is as per the UAE’s Labor Law. It includes service rules, how they left their job termination or resignation and the type of the service contract, such as limited or unlimited.
How Does It Works?
Sometimes it’s really frustrating to create Excel sheets for gratuity and waste a lot of time. But don’t worry— with this UAE Gratuity Calculator, you can easily get an estimated calculation for free.
Just enter your information, like your salary, years of service, contract type (limited or unlimited), and how you left your job. Boom! You’ll have the exact results you were looking for.
How To Calculate Your End-of-Service Benefits?
I know you’re planning to quit your current job, but that might not be a smart move if you don’t understand the benefits of your End of Service. Calculating your gratuity in the UAE isn’t exactly simple, you need to know several important details before you start.
But don’t worry, we won’t ask you to work through Excel sheets. With our Gratuity Calculator, you can get it done in just a few clicks.
Article 51 of the UAE Labour Law clearly outlines the gratuity benefits for expatriate employees in the private sector.
Here are a few points to remember and questions to ask yourself before applying for gratuity in the UAE:
- Have you completed at least one year of service?
- What is your basic salary?
- What type of contract do you have (limited or unlimited)?
- What was the actual reason for leaving your job?
- What were your employment start and end dates?
Rules for End-of-Service Benefits
Here are the rules for those who have ended their service through resignation or termination.
Termination
Check out the updated termination rules:
For example:
- If I am terminated before completing one year of service, I won’t receive any gratuity.
- If I am terminated after completing one year but before five years, I will receive 21 days of basic pay for each year of service.
- If I am terminated after completing five years of service, I will receive 21 days of basic pay for the first five years, and 30 days of basic pay for each additional year.
Resignation
Did you resign from your current job, or are you planning to resign? If so, you should consider checking out these rules first.
For example:
- If I resign before completing one year of service, I won’t receive any gratuity.
- If I resign after one to three years of service, I’ll be eligible for one-third of 21 days’ basic salary for each year of employment.
- If I resign after three to five years, I’ll receive two-thirds of 21 days’ basic salary for each year I’ve worked.
- If I resign after five years, I’ll be entitled to 21 days of basic salary for the first five years, and 30 days for each additional year of service.
Am I eligible for gratuity in the UAE?
In the UAE, gratuity pay is exclusively for expatriate employees. UAE nationals aren’t eligible because they benefit from the mandatory National Pension Plans, which expatriates don’t qualify for.
Can my gratuity be denied?
According to Article 139 of the UAE Labour Law, there are situations where an employee may not be entitled to gratuity. Here’s a breakdown:
- If you resign without giving proper notice, unless it’s for specific reasons, you won’t receive gratuity. This applies to both unlimited contracts and limited contracts if you leave before completing five years.
- If you’re terminated for specific reasons or choose to resign to avoid being dismissed, it could result in losing your gratuity.
Formula for Calculating Gratuity on a Limited Contract
With a limited contract, you’re committed to working for a fixed period. If you don’t fulfill this term, you could lose certain rights, including your gratuity. For a detailed breakdown of how gratuity is calculated for a limited contract, click here to view the formula.
For service between 1 to 5 years:
Gratuity = (Basic Salary x 21 days x number of years worked) / 30
For service beyond 5 years:
Gratuity = (Basic Salary x 30 days x number of years worked) / 30
Formula for Calculating Gratuity on Unlimited Contracts
An unlimited contract doesn’t tie you to a fixed duration, allowing you to leave with a notice period ranging from one to three months. Whether you choose to resign or are let go, you are entitled to receive gratuity.
Conclusion
Before making the decision to resign from your job in the UAE, it’s crucial to understand your end-of-service benefits, including your gratuity payout. The UAE’s labor laws outline specific rules based on your contract type, years of service, and reason for leaving—whether resignation or termination.
Using our UAE Gratuity Calculator, you can quickly estimate your entitlement without the hassle of manual calculations. Simply input your basic salary, contract type, and employment details to get an accurate breakdown of your gratuity.
Make an informed decision before leaving your job calculate your gratuity today and plan your next steps with confidence!