Gratuity Calculator UAE

Gratuity Calculator Dubai

Employees in the UAE get numerous benefits at the end of their service. Gratuity is one of the prominent benefits. It is the payment due on your employer when you leave your job or the term of your service ends. At times, employees are unaware of this benefit. They don’t know the policies regarding gratuity, how to calculate gratuity in UAE, and what factors could impact it. If you are one of them, we are here to guide and assist you.

Disclaimer

Our gratuity calculator is not a legal tool. It is there to assist you in understanding and calculating your expected gratuity amount. These gratuity calculations are based on general UAE labor laws and your provided information. So, don`t expect it to be 100 percent accurate. There might be some errors in calculations due to various factors like the compensations availed in your working tenure, specific conditions of your employment agreement, incomplete information, etc.

Gratuity Calculator Dubai is not liable for any errors in gratuity calculations, and these calculations should not be used for legal purposes. We recommend hiring a lawyer for legal proceedings.

How to Calculate Gratuity in UAE using “Gratuity Calculator UAE”?

Here is an easy step-by-step guide for your gratuity computation:

  • First, select your contract type as limited or unlimited
  • Next, select the circumstances of end of service as termination or resignation
  • Then, enter your basic salary
  • Press calculate and get your gratuity computation in no time.

You won’t need any formulas and intense calculations while computing your gratuity through our gratuity calculator Dubai. It will do the job for you.

This end-of-service gratuity calculator is beneficial only if your working period is more than one year and your termination is a legal one with a good work record.

Crucial Factors for Calculating Gratuity

Gratuity calculations using our gratuity calculator are easy. But before calculating your gratuity, you must understand some basic rulings. Multiple factors impact your gratuity calculations:

Eligibility Criteria:

  • Your gratuity is according to your working tenure.
  • You are not eligible for gratuity if your working tenure is less than a year

Contract type

Your contract type also impacts your gratuity calculations.

Limited Contract Type

  • If your working period is between 1 – 5 years, you will get a salary of 21 days as a gratuity for each year.
  • If your service period is more than 5 years, you will get a salary of 21 days as gratuity for the first 5 years, and 30 days as gratuity for each year after the 5th year.
  • Your total gratuity must be less than your basic pay for 2 years.
  • You will be eligible for your gratuity after completing your working tenure.

Unlimited Contract Type

In the case of unlimited contract type, your gratuity computation is based on your service period and on your end-of-service circumstances.

In case of Termination:

  • If your working period is between 1 – 5 years, you will get a salary of 21 days as a gratuity for each year.
  • If your service period is more than 5 years, you will get a salary of 21 days as a gratuity for the first 5 years and 30 days as a gratuity for each year after 5th year.
  • Your total gratuity must be less than your basic pay for 2 years.

In case of Resignation:

  • If your working period is between 1 – 3 years, you will get one-third of your 21 days` salary as gratuity for each year.
  • If your working period is 3 – 5 years, you will get two-thirds of 21 days` salary as gratuity for each year.
  • If your service period is more than 5 years, you will get a salary of 21 days as gratuity for the first 5 years and 30 days as gratuity for each year after the 5th year.
  • Your total gratuity must be less than your basic pay for 2 years.

Also, remember

  • The gratuity amount is according to the last basic salary of your service period.
  • Your gratuity amount will be according to your basic salary only. All other allowances will be excluded while calculating gratuity.
Employment Contract

Understanding Gratuity Calculation Methods in UAE Employment Contracts

Our gratuity calculator Dubai will cater to your need to estimate your gratuity amount. But if you want to dive deep and know how we can calculate gratuity manually, here are the guidelines for calculating gratuity through formulas.

Formula of Gratuity Calculation for Limited Contract Type

If you are on a limited contract, you can calculate your estimated gratuity after completing your service period by this formula.

  • Divide your basic salary by 30 to get your per-day salary.

Basic Salary/30 = Per day salary
For instance, if your basic salary is 9,000 Dirhams,
9,000/30= Dh 300

  • Now, multiply your per day salary by 21 to get your 21 days` salary. It is your per-year gratuity.

Per day salary * 21= Per year Gratuity
300*21= Dh 6,300

  • If your service tenure is between 1 – 5 years, multiply your 21 days` salary by the number of years.

Per year gratuity * Service years = Gratuity
For 3 year contract,
6300*3= Dh 18,900

  • If your service tenure is more than 5 years, then multiply your basic monthly salary for the 5th year onwards.

For instance, if your service tenure is 7 years,
9000*2= Dh 18,000.
It will be your gratuity for the 6th and 7th year.

  • Your total gratuity will be the sum of the gratuity of the first 5 years and the gratuity of 5th year onwards.

Gratuity of first 5 years + Gratuity of 5th year onwards = Total Gratuity
18,900 + 18,000= Dh 36,900

Formula of Gratuity Calculation for Unlimited Contract Type

Your gratuity calculations will remain the same in case of termination in unlimited contract type. But if you have resigned from your job, add these steps to the gratuity calculation.

  • Divide your basic salary by 30 to get your per-day salary.

For Dh 9,000 basic salary,
9,000/30= Dh 300

  • Now, multiply your per day salary by 21 to get your 21 days` salary.

300*21= Dh 6,300

  • If your service tenure is between 1 to 3 years, calculate one-third of 21 days` salary

6300* 1/3 = Dh 2100
It is your per-year gratuity.

  • Now multiply this amount by your number of service years.

For instance, for 2 years
2100*2 = Dh 4200
It will be your gratuity amount.

  • If your service tenure is between 3 to 5 years, calculate two-thirds of 21 days` salary

6300* 2/3 = Dh 4,200
It is your per-year gratuity.

  • Now multiply this amount by your number of service years.

For instance, for 4 years:
4200*4 = Dh 16,800
It will be your gratuity amount.

  • If you resign after more than 5 years of service, your gratuity calculation will be the same as for a limited contract-type employee.

Common Mistakes and Misconceptions to avoid while calculating gratuity in UAE

# 01 Interpretation of Salary

Mistake: I will get my gratuity on my total salary.

Clarification: Your gratuity is according to your basic salary. It excludes all allowances from your salary, like housing allowance, fuel, medical compensation, etc.

# 02 Calculation of Service Duration

Mistake: I will get my gratuity on the approximated duration of service.

Clarification: Your gratuity should be calculated based on the exact duration of your service tenure. There is no round-off thing when it comes to gratuity calculation.

# 03 Understanding Contract Type

Mistake: I will get the same gratuity per year of service regardless of my contract type.

Clarification: According to UAE Labor Laws, formulas of gratuity calculations are different for limited and unlimited contract-type jobs.

# 04 End of Service Benefits:

Mistake: Gratuity is the other name for end-of-service benefits.

Clarification: Your gratuity is just one component of your end-of-service benefit. There might be other benefits as well based on your job agreement.

# 05 Overgeneralization

Mistake: Gratuity is the same for everyone regardless of when they leave the job.

Clarification: The gratuity amount varies with the tenure of your service. You are not eligible for gratuity if your service period is less than one year.

Tips to Increase Gratuity

  • Thoroughly read and understand your job agreement, especially the gratuity policy of your company.
  • In case of a limited contract job, try to complete your service tenure to avoid any deductions.
  • If you are not satisfied with your job, resign at the time when you get maximum gratuity.
  • Keep a close eye on updates in UAE labor laws.
  • Use the gratuity calculator Dubai to calculate your expected gratuity and then plan your resignation accordingly.

End-of-service calculators are beneficial for estimating your gratuity and other benefits. These tools enable you to plan your resignation and avail maximum benefits at the end of your service. But like any other tool, these gratuity calculators in UAE are not foolproof. They are bound to make mistakes and errors due to various factors.

It is recommended not to over-emphasize gratuity calculations through tools like Gratuity Calculator Dubai and to consult a professional before making your final move.