How do I calculate end of service gratuity for employees in UAE?

Under Article 134 of the UAE Labour Law, end of service benefit payment is calculated based on the employee’s basic salary.

When an employee resigns from an unlimited term contract, they will be entitled to a gratuity payment as per the following scale:

Less than 1 year of service
Where an employee leaves employment prior to completing one year of service they will not be entitled to gratuity payment
Between 1 year and 3 years of service
Employee is entitled to 7 days gratuity payment (One third of the 21-days gratuity pay)
Between 3 years and 5 years of service
Employee is entitled to 14 days gratuity payment (Two thirds of the 21-days gratuity pay)
5 or more years of service
Employee is entitled to the full 21 days gratuity pay for each year of service.

For Limited Term Contracts gratuity payments are calculated based on the below scale:

Less than 1 year of service
An employee who leaves employment prior to completing one year of service is not be entitled to gratuity payment
Between 1 year and 5 years of service
Employee is entitled to full gratuity pay based on 21 days salary for each year of work.
5 or more years of service
Employee is entitled to full gratuity pay based on 30 days salary for each year of work.

If you need assistance with gratuity calculation, staff, family and dependant visas or other related company set up, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.