End Of Service Calculator UAE Labour Law

UAE Labour Law Gratuity Formula:

\[ Gratuity = (Basic\ Salary \times \frac{21}{30}) \times Years\ (\leq5\ yrs) + (Basic\ Salary \times \frac{30}{30}) \times (Years - 5)\ (>5\ yrs) \]

Gratuity (AED):

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1. What is UAE Labour Law End-of-Service Gratuity?

The UAE Labour Law end-of-service gratuity is a financial benefit provided to employees upon termination of employment. It is calculated based on the employee's basic salary and years of service, with different rates for the first 5 years and subsequent years.

2. How Does the Calculator Work?

The calculator uses the UAE Labour Law gratuity formula:

\[ Gratuity = (Basic\ Salary \times \frac{21}{30}) \times Years\ (\leq5\ yrs) + (Basic\ Salary \times \frac{30}{30}) \times (Years - 5)\ (>5\ yrs) \]

Where:

\( Basic\ Salary \) — Monthly basic salary in AED
\( Years \) — Total years of service
\( \frac{21}{30} \) — Factor for first 5 years of service
\( \frac{30}{30} \) — Factor for years beyond 5 years

Explanation: The formula calculates gratuity at 21 days' basic salary per year for the first 5 years, and 30 days' basic salary per year for each additional year beyond 5 years.

3. Importance of Gratuity Calculation

Details: Accurate gratuity calculation is crucial for ensuring employees receive their rightful end-of-service benefits as per UAE Labour Law regulations.

4. Using the Calculator

Tips: Enter basic salary in AED per month and total years of service. All values must be valid (basic salary > 0, years > 0).

5. Frequently Asked Questions (FAQ)

Q1: What is included in basic salary for gratuity calculation?
A: Basic salary typically excludes allowances such as housing, transportation, and other benefits. Only the fixed basic salary component is used.

Q2: Are part-time years considered in the calculation?
A: Only full-time continuous service is considered for gratuity calculation under UAE Labour Law.

Q3: What happens if employment is terminated before completing one year?
A: Employees are not entitled to gratuity if they leave before completing one year of continuous service.

Q4: How is gratuity calculated for incomplete years?
A: For incomplete years, gratuity is calculated proportionally based on the number of days worked.

Q5: Are there different rules for different types of termination?
A: Yes, gratuity amounts may vary depending on whether termination is by employer or employee, and the circumstances of termination.