How to calculate UAE gratuity pay

dubai : Calculating your end-of-service ( gratuity ) pay up is authoritative. Knowing how the sum summarize is reached will help you identify any errors made by your company.

Contract types

A restrict or fixate term contract is where the employee agrees to stay with the company for a certain act of years with a set end date. Resigning before the end of this period could mean one or all of these ; a labor prohibition, loss of parturiency rights or tied payment of compensation to the employer. An outright contract has no such time period article or act of years, and consequently, has no end date. however, a notice period of one to three months is applicable for result of contract from either side.

Gratuity wage is calculated based on the your basic wage/salary paid into your report without extra allowances or bonuses. article 134 of the Labour Law clarifies what this constitutes : “ The wage used as a basis for calculating the end of service gratuity shall not include payments made to the proletarian in reimbursements, caparison, enchant and travel allowance, overtime pay, representation allowance, cashier ’ south allowances, children department of education valuation reserve, allowances for amateur and social services, and any early bonuses or allowances. ”

No gratuity pay?

If you are terminated from your problem, unless you break the rules as stated in Article 139 of the Labour Law, the employee is however entitled to gratuity pay. The rules in this Article state : The employee shall be deprived of his/her end of service gratuity in the following two cases : a – If he or she is dismissed from service for any of the reasons set forth in Article 120 or if he or she quits employment in view of avoiding the dismissal in accord with the article. ( This article deals with dismissal during or at end of probation, or due to charges of material loss, failure to perform basic duties even after a admonitory, interrogation, crime etc. ) b – If he or she resigns without notice in cases other than the ones set in Article 121 ( if employer breaches contract or in case of rape ), and such with regards to unlimited contracts, or prior to the completion of five years of continuous service in limited contracts.

Calculations for Limited Contract gratuity pay

Less than 1 year of service

Leaving work before completing one ( 1 ) class of service means that you are not entitled to any gratuity pay.

Between 1 year and 5 years of service

Employee is entitled to full gratuity yield based on 21 days wage for each year of work.

5 or more years of service

Employee is entitled to wax gratuity give based on 30 days wage for each year of knead.

Calculation example

Basic salary example: Dh10,000

a. 10,000 ÷ 30 = 333.30. Your day by day engage is Dh333.30. barn. 330.30 ten 21 = 6,936.30. so 21-days wage is Dh7,000 ( rounded up from Dh6,999.30 ) in gratuity entitlement for each year of service. Multiply this figure for every year of serve up to 5 years. For 30 days calculation for those exceeding 5 years of service c. 333.30 x 30 = Dh9,999. so 30-days wage is Dh9,999 in gratuity entitlement for each class of service – sol retentive as the total digit does not exceed sum wage of two years. therefore, regardless of the years spent at a firm, total gratuity in the above example can not exceed Dh240,000.

Calculations for Unlimited Contract gratuity pay

Less than 1 year of service

Leaving work before completing one ( 1 ) year of serve means that you are not entitled to any gratuity give.

Between 1 year and 3 years of service

Employee is entitled to one third base ( 1/3 ) of the 21-days gratuity pay.

Between 3 years and 5 years of service

Employee is entitled to two thirds ( 2/3 ) of the 21-days gratuity give.

5 or more years of service

Employee is entitled to full 21-days gratuity wage for each year of serve.

Calculation example

Basic wage model : Dh10,000 a. 10,000 ÷ 30 = 333.30. Your day by day wage is Dh333.30 b. 333.30 ten 21 = 6,999.30. so 21-days wage is Dh6,999.30 Of this name of Dh6,999.30, alone 1/3 is account payable if you have worked between 1 and 3 years, so the sum gratuity pay would be Dh2,333.10. only 2/3 is account payable if you have worked between 3 and 5 years, so the sum gratuity wage would be Dh4,666.20. The full Dh6,999.30 is account payable if you have completed 5 years. These calculations are not to be treated as police, they are for your reference only. For any disputes or far clarification, contact the UAE Ministry of Human Resources and Emiratisation.

Formula

1. basic wage ÷ 30 = Daily wage 2. day by day engage x 21 = 1 year gratuity figure ( Or x30 if applicable ) 3. 1 year gratuity calculate x years of service = Total gratuity owed only continue for Unlimited Contract calculation 4. total gratuity owed ÷ 3 = One third ( 1/3 ) of sum gratuity 5. Either take this figure ( between 1 and 3 years ) or multiply it by two ( between 3 and 5 years )

6. For over 5 years, total gratuity owed will be collectible. reservoir : UAE Ministry of Human Resources and Emiratisation Laws Gulf News is not responsible for any amendments made to the UAE Labour Law. All labour disputes must go through the Ministry of Labour. This article may only be used as a guide.

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Category : Tech

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