How to calculate your Dubai gratuity: A step-by-step guide
Knowing your rights as an employee in the UAE is vital for various reasons. While most companies operating in the country diligently ensure that employees get their end-of-service benefits like gratuity, unintended errors sometimes happen. Therefore, it always helps to know how to calculate your gratuity. Does the math sound daunting? Here’s how you can easily work out your Dubai gratuity.
RULES REGARDING DUBAI GRATUITY PAY
Before we look at the rather complex calculation, let’s figure out what a gratuity payment is. Gratuity pay is derived from a basic formula which includes the service period and salary. This means that any payments made to the employee other than the basic wage are not considered in the final calculation.
Dubai gratuity law in Article 134 of the UAE Labour Law states that:
“The wage used as a basis for calculating the end of service gratuity shall not include payments made to the worker in reimbursements, housing, transport and travel allowance, overtime pay, representation allowance, cashier’s allowances, children education allowance, allowances for recreational and social services, and any other bonuses or allowances.”
ELIGIBILITY FOR GRATUITY IN DUBAI
To be eligible for gratuity payments, an employee must work for a company for a year at least. Even if an employee was terminated after twelve months, they are still eligible for gratuity pay.
However, Article 139 of the Labour Law outlines conditions when an employee would be ineligible for gratuity pay. The list includes the following:
- Employees receive no gratuity
- If they are dismissed at the end of the probation period
- They fail to perform basic duties despite being given warnings
- They are terminated due to material loss proved after interrogation
- Employees can be ineligible for gratuity pay if they resign to avoid dismissal.
- There will be no gratuity pay if an employee resigns without notice or if there is a breach of contract or a case of assault.
GRATUITY FORMULA
As mentioned earlier, if an employee leaves a company before completing a year of service, he or she will not be eligible for gratuity. After one year, gratuity calculation is based on years of service.
If an employee has served an organisation for more than a year, but less than five years, he or she will be eligible for gratuity based on 21 days’ salary for each year of work.
On the other hand, if the years of service are five or more, the final gratuity will be based on 30 days’ salary for each year they have worked for the company.
Please remember that unpaid leave days are NOT INCLUDED in calculating the gratuity for private sector employees.
A full-time employee in the private sector who has completed a year or more of continuous service is entitled to an end-of-service gratuity at the end of their service, however, unpaid leave days are not included in calculating the gratuity. #MoHRE #UAE pic.twitter.com/WdTu7bmTf8
— وزارة الموارد البشرية والتوطين (@MOHRE_UAE) January 10, 2023
ONLINE GRATUITY CALCULATOR DUBAI
To calculate your Dubai gratuity, use the official Dubai Development Authority calculator. All you need to know is your basic salary and years of service. Enter the details, and the online gratuity calculator Dubai will give you the exact number.
FAQS
HOW TO CALCULATE GRATUITY IN DUBAI?
Visit the official government portal mentioned above, which is backed by the Dubai Development Authority (DDA). Enter details, including basic pay and years of service, to calculate gratuity in Dubai.
As per the latest MOHRE announcement for private sector employees, unpaid leave days are not included in calculating the gratuity.
WHAT CHANGES HAVE BEEN MADE TO UAE LABOUR LAW IN 2022?
Want to learn more about the latest labour law amendments? This guide on UAE Labour Law amendments 2022 highlights the changes that have been made.
The process of calculating Dubai gratuity has been made simple thanks to the government portal. So, if you are in the process of leaving your job, calculate your gratuity and make you are getting your due share. Remember, Dubai’s new gratuity law ensures everyone gets the amount they are entitled to.
Those employed in DIFC can read more about the DIFC gratuity law. Confused about tracking MOHRE complaint? Check out our guide on how to check labour complaint status, designed to answer all your queries.
