Calculations for gratuity pay in dubai for Private sector

In Dubai, the gratuity pay for employees in the private sector is calculated based on the length of service and the employee's last drawn salary. The gratuity pay is governed by the UAE Labour Law.

According to the law, if an employee has completed one year or more of continuous service, they are entitled to a gratuity payment upon termination of their employment.

The gratuity pay is calculated as follows:

1. For employees with an unlimited contract:

• If the employee resigns before completing 1 year of service, no gratuity pay is applicable.
• If the employee completes 1-5 years of service, they are entitled to receive 21 days of basic salary for each year of service.
• If the employee completes more than 5 years of service, they are entitled to receive 30 days of basic salary for each year of service.

2. For employees with a limited contract:

• If the employee resigns before completing the contract period, no gratuity pay is applicable.
• If the contract period is completed, the employee is entitled to receive a gratuity payment based on the length of service as mentioned above.

It's important to note that the basic salary is used for the calculation, excluding any allowances or bonuses. Additionally, if an employee is terminated due to misconduct, they may not be eligible for gratuity pay.

UAE Gratuity: When will I not get it?

If you, as an employee, resign before completing one full year of work, then you will no t be entitled to any gratuity pay.

If you are terminated

If you are terminated, the calculation will go something like this:

• If you have served more than one year but less than five years, you are entitled to 21 calendar days’ basic salary for each year of the first five years of work.
• If an employee has served over five years, they are entitled to 30 calendar days’ basic salary for each additional year, provided the entire compensation does not exceed two years’ pay.
• Your unpaid leave days will not be included.

If you choose to resign

• If you resign, the calculation will be as follows:
• If you resign before completing one year of service, you are not entitled to any gratuity pay.
• If you have served between one and three years, you are entitled to 1/3 of 21 days’ basic salary as gratuity pay for each year worked.
• Employees who have served between three and five years are entitled to 2/3 of 21 days’ basic salary as gratuity pay for each year worked.
• If you have served more than five years, you are entitled to the full 21 days’ basic salary as gratuity pay for each year worked.
• Your unpaid leave days will not be included.

Please keep in mind that this information is a general guideline, and it's always recommended to refer to the UAE Labour Law or consult with a legal professional for specific cases or further clarification.