End Of Service Calculator UAE MOHRE

UAE MOHRE Gratuity Formula:

\[ Gratuity = (Basic\ Salary \times \frac{21}{30}) \times Years_{first\ 5} + (Basic\ Salary \times \frac{30}{30}) \times Years_{after\ 5} \]

Gratuity (AED):

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1. What is UAE MOHRE End-of-Service Gratuity?

The UAE MOHRE (Ministry of Human Resources and Emiratisation) end-of-service gratuity is a legal entitlement for employees who complete one or more years of continuous service. It serves as a financial reward for years of service upon termination of employment.

2. How Does the Calculator Work?

The calculator uses the UAE MOHRE gratuity formula:

\[ Gratuity = (Basic\ Salary \times \frac{21}{30}) \times Years_{first\ 5} + (Basic\ Salary \times \frac{30}{30}) \times Years_{after\ 5} \]

Where:

\( Basic\ Salary \) — Monthly basic salary in AED
\( \frac{21}{30} \) — Daily wage factor for first 5 years
\( \frac{30}{30} \) — Daily wage factor for years after 5
\( Years_{first\ 5} \) — Years of service up to 5 years
\( Years_{after\ 5} \) — Years of service beyond 5 years

Explanation: The formula calculates gratuity based on 21 days' pay for each year of the first 5 years, and 30 days' pay for each additional year beyond 5 years.

3. Importance of Gratuity Calculation

Details: Accurate gratuity calculation ensures employees receive their legal entitlements upon termination of employment. It helps both employers and employees understand financial obligations and rights under UAE labor law.

4. Using the Calculator

Tips: Enter basic monthly salary in AED (excluding allowances), total years of service in years. All values must be valid (salary > 0, years > 0).

5. Frequently Asked Questions (FAQ)

Q1: What is included in basic salary for gratuity calculation?
A: Basic salary includes the fixed monthly wage excluding allowances, commissions, bonuses, and other variable components.

Q2: What happens if employment is terminated before one year?
A: No gratuity is payable if employment is terminated before completing one year of continuous service.

Q3: Are there different rules for limited vs unlimited contracts?
A: Yes, gratuity calculations may differ based on contract type and reason for termination (employer vs employee initiative).

Q4: How is partial year calculated?
A: Partial years are calculated proportionally based on completed months of service.

Q5: Is gratuity taxable in the UAE?
A: No, end-of-service benefits are not subject to taxation in the United Arab Emirates.