Are you deciding to resign from your current job? You are planning to leave the UAE? According to the UAE labor law, all employees are entitled to receive gratuity amounts or end-of-service benefits. This gratuity amount is entitled to those employees who have finished the full term of their employment contract.
In this blog, we’re going to talk about the graduate salary calculator in Dubai. We’ll talk about how graduation depends on different factors. For example, your gratuity amount depends on the type of contract. It also depends on the total number of years served in the firm. You also have to figure out the reason for the termination of your contract and basic salary. If you are working in UAE, then this blog is beneficial for you. Don’t skip any section and keep reading.
Eligibility for Gratuity
There are two types of contracts in thought you were ready for you to know. The limited contract means that the employee agrees to stay with the company for a particular date. If you resign before that decided date. Then it would result in loss of labor rights, labor ban, or compensation of payment to the employer. However unlimited contract has no number of years and no one date. In unlimited contract one to three months of notice. Is needed.
Let’s talk about eligibility for graduating now. If you resign before completing one full year of work. Then you will not get any gratuity amount. If you are terminated in your office, then the calculation would be like this:
if you have served more than one year but less than five years. Then you are given 21calendar days of basic salary. This salary is given for each year of the first five years of work. If an employee has served more than five years, they’re entitled to get 30 calendar days basic salary. This is given for each year and the compensation does not exceed more than two years’ pay.
If you decide to resign, then cancellation will be as follows:
If resigned before completing one year of service. Then you will not get any gratuity pay. If you have served between one to three years, then you will get one by three of 21 days basic salary.
If you have served between three to five years, then you will get two by three off 21 days basic salary.
Lets suppose you have served more than five years you will get the full 21days basic salary as gratuity pay. Your unpaid leave days are exempt in the gratuity amount calculation.
Advantages of Gratuity Salary Calculator Dubai
Let’s discuss the benefits of gratuity amount for Emiratis working in the UAE. Here are some of the benefits of gratuity for foreign workers.
They will get a gratuity for the year they served. They will get gratuity as they complete one year of their services.
You can calculate the gratuity on the basis of the last wage. But the other allowances are exempt.
However, the gratuity helps the employee to stay stable for a while. But if the employee owes money to the owner. Then there will be a deduction.
The other benefit of gratuity is that within 14 days he will be given all the end-of-service settlements.
If you have served more than five years. Then you will get the full 21 days’ salary as a gratuity amount for each year.
If you have served between three to five years. Then you are entitled to 2/3 of 21 days’ basic salary, which is also a great amount.
What is The Meaning of Gratuity in Salary?
As we discussed above the gratuity is the sum that the employee get. The employees get the amount as a token of appreciation. If you are living in the city of UAE and work for a private company. You do not have to worry about your termination or resignation. You will get the amount of gratuity on the basis of your service period.
Gratuity in salary is the monetary amount that is given to the employee. This is given under the payment of gratuity Act 1972. This is mainly paid to the employee to help them settle till new job. It also makes up the gross salary of the employee.
However, an employee is eligible to receive the gratuity amount. Only after they complete at least one year. The employer can pay their employees the gratuity amount from their own account. The company further pays the annual contribution. The insurance company can also pay the gratuity amount to the employee. However, the gratuity amount is paid by the employer only without any involvement of the employee.
What are the eligibility criteria to receive gratuity?
Here is the checklist to see if an employee is eligible to get the gratuity amount.
- The employees retire from work.
- They pass away or suffer from disability.
- They resign after working for a fraction of a year.
- The employee must not be terminated due to misconduct.
- The employee service must be terminated for valid reasons.
- The total gratuity amount will not exceed the amount of the 2 years salary.
Who Can Receive Gratuity?
If you are an employee in the UAE. Then it is important for you to know who can receive the amount of gratuity. The eligibility criteria are simpler than it looks. According to the UAE labor law, all the employees will get a gratuity. If they have served for at least one year, they will receive the gratuity.
The employees are nationals or foreigners will get the gratuity amount. However, there are a few exceptions to the rule.
The employees who are terminated on some redundancy will get a pro-rated gratuity. If you have served for at least five years will get the 21 days basic salary.
After five years of service, the employee will get the gratuity of 30 days basic salary.
If you are thinking about when you will get the gratuity amount. Then, do not worry because this is paid within a month.
If you are afraid that the employer will be late with the gratuity payment. Then you can file a complaint with the Ministry of Human Resources and Emiratization.
So, those who have completed at least one year of services will get the gratuity amount. Those who are working in the private sector. Employees who are working in national sectors.
Those employees who are terminated for reasons. If the employee is terminated because of misconduct. Then he will not get any gratuity amount.
What is The Gratuity Calculation Formula 2023?
There are many online calculators you will find. These calculators will provide accurate amounts. But still here is the formula for you:
The gratuity formula for limited contracts:
Job termination from 1 year to 5 years tenure = 21 days salary for each year.
If your basic salary is 3000. And you have completed 4 years. The gratuity is:
21*3000/30*4 = gratuity AED 8400
Working more than 5 years = 30 days salary for each year. The formula is (30*basic salary/30*years of services= Gratuity amount).
If your basic salary is 3000 and have completed 6 years. The gratuity amount will be calculated as 30*3000/30*6 = gratuity AED 18000.
The gratuity calculation formula for an unlimited contract:
If you leave the job in less than one year. Then you will not get the gratuity amount.
The job tenure from 1 year to 5 years = 21 days salary for each year. The formula is 21*basic salary/30*years of services= Gratuity amount.
If your salary is 3000 basic and have completed 4 years. The amount of gratuity will be calculated as 21*3000/30*4 = gratuity AED 8400.
If you have worked more than 5 years = 30 days for each year. Formula= 30*basic salary/30*years of services= Gratuity amount.
If your salary is 3000 and have completed 6 years. Then your gratuity will be calculated as:
30*3000/30*6 = gratuity AED 18000.
Till 2022, the method of calculating the gratuity was different. The companies in the UAE use the above-discussed formula. Gratuity is the provision of the federal labor law. So, it is applicable in the entire UAE.
The companies have made a Gratuity Salary Calculator Dubai for the employees to calculate their gratuity. They can calculate the gratuity themselves now. An online gratuity calculator is an easy way to get the best results instantly.
Can an Employer Refuse to Pay Gratuity?
No, the employee cannot refuse to pay gratuity in the UAE. if the employee is eligible for the gratuity. Then the employee has to pay the gratuity within one month. If you want to be eligible for the gratuity, then you must have:
At least one year of service tenure completed.
Terminated from the job due to these reasons:
- Death
- Resignation
- Retirement
- Permanent disability
- End of contract
If your employer refuses to pay gratuity. Then you can take these certain steps:
- File a case in the Labor Court.
- File a complaint with the MOHRE.
- Try to resolve the issue on your own with the employer.
Steps on How to Calculate Gratuity in Salary
Step 1:
It is very important to know the steps to calculate the gratuity in salary. The Gratuity Salary Calculator Dubai is an easier resort to calculate your gratuity. However, it is important to know the manual steps for the gratuity calculator. Job termination from 1 year to 5 years tenure = 21 days salary for each year.
If your basic salary is 3000. And you have completed 4 years. The gratuity is 21*3000/30*4 = gratuity AED 8400. Working more than 5 years = 30 days salary for each year. The formula is (30*basic salary/30*years of services= Gratuity amount). If your basic salary is 3000 and have completed 6 years. The gratuity amount will be calculated as 30*3000/30*6 = gratuity AED 18000.
Step 2:
If you leave the job in less than one year. Then you will not get the gratuity amount. The job tenure from 1 year to 5 years = 21 days salary for each year. The formula is 21*basic salary/30*years of services= Gratuity amount. If your salary is 3000 basic and have completed 4 years. The amount of gratuity will be calculated as 21*3000/30*4 = gratuity AED 8400.
If you have worked more than 5 years = 30 days for each year. Formula= 30*basic salary/30*years of services= Gratuity amount.
If your salary is 3000 and have completed 6 years. Then your gratuity will be calculated as 30*3000/30*6 = gratuity AED 18000.
Recent Gratuity Related Developments
Let’s talk about the recent developments in the UAE gratuity.
The MOHRE issued a new circular in 2021. It clarified further about the fixed contracts. The gratuity was payable even if the fixed contract was not completed. The amount was on the average pay for the contract duration.
The MOHRE issued a new circular in 2022. It clarified the gratuity for the employees who were on probation. The calculation was based on the average salary of the employee. These were the few developments in gratuity. Also, we have discussed the recent updates above. This blog will help you to know your basic right of gratuity.
Conclusion
As per the UAE labor law, all employees are entitled to receive gratuity amounts or end-of-service benefits. This gratuity amount is entitled to those employees who have finished the full term of their employment contract. It also depends on the total number of years served in the firm. In this blog, we discussed the eligibility criteria for the gratuity amount. We also discussed gratuity calculation in depth. will help you to calculate your gratuity amount accurately. We have also made a Gratuity Salary Calculator Dubai for you to use online. Our online calculator will help you to calculate your gratuity quickly. If you still need assistance to discuss your gratuity. Contact us today to get more ideas about the gratuity law in Dubai.
