The UAE labour law covers many of your rights as an employee including employment contracts, records of employees, salaries, working hours, national holidays, annual leave, health and safety of employees, disciplinary codes of conduct, termination of appointment, repatriation and gratuity or end of service benefits. The Ministry of Labour has introduced a compulsory electronic salary transfer system, to guarantee prompt salaries of all employees.
Calculation of Gratuity/Severance Pay
According to Article 132 of the UAE Labour Law, a worker who has completed one or more years of continuous service shall be entitled to severance pay at the end of his employment. The severance pay shall be calculated as follows:
21 days’ wage for each of the first five years of service
30 days’ wage for each additional year of service provided always that the aggregate amount of severance pay should not exceed two year’s wage.
Severance pay shall be calculated on the basis of the wage last due, but shall not include whatever is given in kind, housing allowance, transport allowance, travel allowance, overtime pay, representation allowance, cashier’s allowance, children’s education allowance, allowance for recreational and social facilities and any other bonus or allowances (Article 134)
Deductions in Severance Pay
Where a worker under an indefinite term contract abandons his work at his own initiative after a continuous service of not less than one year and not more than three years, he shall be entitled to one-third of the severance pay. Such a worker shall be entitled to two-thirds of the said severance pay, if his continuous service exceeds three years up to five years and to the full severance pay if it exceeds five years. (Article 137)
Where a worker under a definite term contract abandons his employment at his own initiative before the expiry of his contract period, he shall not be entitled to severance pay, unless his continuous period of service exceeds five years. (Article 138)
For more queries / clarifications about Severance / End of Benefits Pay as per UAE Labour Law, please contact Ma'am Isabel Saguinsin II at +971 50 752 8573 any day after 9pm or send your comment and will respond accordingly.
An employee of a multinational company worked 3 years abroad, and then moved to Dubai and worked for 2 year here. Now she is laid off. Is she entitled for the End of Service Gratuity for the past 5 years? Shouldn't it be for 2 year as this is the only time worked in Dubai.
ReplyDeletePlease let me know in dubai, labour law gratuity calculation, salary is last salary paid or contract salary..?
ReplyDeletePlease let me know in dubai, labour law gratuity calculation, salary is last salary paid or contract salary..?
ReplyDeleteI have a friend who will complete her 3 years of service next month and would like to inform her company of her decision not to renew her visa as she is going back to her home country. How much she is entitled for? Is it 7 days per year or the 21 days since she already completed 3 years?
ReplyDeleteWe've asked a lot of people and we were told that it depends on the company she is working for, what exactly is the rule with the 'finished contract' given that it is an unlimited one?
If you submit a letter of non-renewal of contract to your employer, at least a month before your visa expires, is it considered NOTICE of non-renewal or resignation?
I would really appreciate if you could shed some light on this matter as my friend and I are confused whether her company will consider her letter as resignation or as notice of termination of contract. Are we correct that if it is finished contract then she is entitled for 21 days x 3 years settlement, but if she resigned then she would only receive 7 days per year of service.
Thanks!
I would like to know how the end-of service gratuity is calculated and whether it is calculated on the basic salary basis plus the commission and overtime hours, and whether the said salary is calculated in the employment contract or the current salary. Please advise, thank you.
ReplyDeleteI have recently left my employment of the last 5 years and 4 months and are having a bit of a battle with my previous company over the amount of settlement due for this part year. From what they have sent me it says "I'm entitled to 21 days remunerating for each year of the first 5 years of service & 30 days remuneration for each additional year or part thereof". So from this I expected that I'm entitled to 30 days remuneration but they are only offering to pay me 13.
ReplyDeleteCan anyone help me out with the current ruling please as I know the laws here change as often as the British weather.
uae labour law gratuity calculation for first 5 years how much and additional years?.?
ReplyDeleteuae labour law gratuity calculation for first 5 years how much and additional years?.?
ReplyDeleteHOW MUCH WOULD IT BE THE CALCULATION OF THE GRATUITY IF THE WORKER HAD RESIGNED TO THE COMPANY AFTER SEVEN CONSECUTIVE YEARS OF SERVICE.
ReplyDeleteHi, a few questions:
ReplyDeletea) How many days the year is calculated? .. 360?
b) How many month are calculated? .. 12?
c) I assume Only basic salary is calculated ( .. housing allowance, bonus, etc .. to be excluded)?
My contract terminated by company before the period , i can claim any copensation and i compleeted my 4 year my basic salary is 3000dhs and my total salary is 8000dhs,,how i will calculate my gratuity ,santo konnikkara
ReplyDeleteSanto, You are entitled for 21 days each year for the first five years of service. Gratuity is calculated based on the last wages due and shall not include any allowances provided in your contract.
ReplyDeleteSanto, You are entitled for 21 days each year for the first five years of service. Gratuity is calculated based on the last wages due and shall not include any allowances provided in your contract.
ReplyDeleteI have work for 5 years in a company and now decided to finish my contract and go back home. as they have calculated my gratuity the basic salary was reduced by 30 percent due to their calculation. instead of my per hour is 9.5 ae it becomes 6.8 per hour. is it possible to have different calculation for your basic wage and for the gratuity rate? if we complain in ministry of labor, how much time will this consume? im book to go this 28th, but undecided to continue the complain due to the lack of time.
ReplyDeletei have worked in UAQ, UAE. after finishing my 3 year contract i have been renewed and went here in the Philippines for a 2-month vacation and i have my visa already. the management told me that i'll wait for my plane ticket because they're going to send it to me. Now it's my second month here in the Philippines (20th January) and until now i don't received any confirmation or email from our company regarding my ticket. just wanna ask if what are the things i am going to do if they don't want me to be part of their company anymore or if they are going to cancel my visa. if that happens can i get my gratuity because i have completed my contract for three years.
ReplyDeletethanks and more power
Sir
ReplyDeleteI Amjad ali my joining date 05-12-2005 to 15-02-2012 in bitween leave 1st 32days, 2nd 60days,3rd 83days,4th 35days. I not extend my visa. How to calculate gratuity 312days or 365 days per year. My basic salary is AED 1590. my eligible gratuity 21days or 30days. this is my comments please reply sir.
thanks/regards
AMJAD ALI
AL AIN
sir
ReplyDeleteI have worwking i a company. now complete of visa I decided to go back home. my joining date:06-012-2005 completion date:15-02-2012.06 years 02 month and 20days. how many days calculation of gratuity year of days 312 or 365 days. my elegible gratuity 21 or 30 days.
please help me
T/R
is gratuity eligibility for limited and unlimited contract the same? i have contract for 3 years.if i completed the contract how many days would i get for gratuity pay? thanks!
ReplyDeleteLimited and unlimited contract holders are eligible for gratuity payment after ending their service.
DeleteEmployed between 1-3 years - 7 days for each year of employment (1/3 of the limited contract amount)
Employed between 3-5 years - 14 days for each year of employment (2/3 of the limited contract amount)
Employed longer than 5 years - 21 days for each year up to 5 years, and 30 days for each year after 5 years (same as for limited contract holders).
is gratuity eligibility for unlimited and limited contract the same?
ReplyDeleteHow is pays' wages calculated? Is a monthly salary divided by 30 days or by 21 days (the actual average working days in a month)? the diference is huge.
ReplyDeleteAccording to the UAE law, wages may be paid on a monthly, weekly, or on a daily basis, depending on the agreed contract.
DeleteMonthly salary computation is depending on the agreed contract signed.
its basic salary divided by 30 multiply by 21
DeleteGratuity eligibility is not the same for limited and unlimited contracts.
ReplyDeletei been working at uae for 2 years and 6 months...i resign for my company...i sign unlimited contract...upon giving my resignation(april 5,2012) 1 month noticed before leave the company..may last day of work was May 6,2012...i been waiting for my final settlement and cancellation for 9 days...how long could it be?and how to compute my gratuity with basic salary of 1,500 aed..thank you.
ReplyDeleteGratuity will be calculated from your Basic Salary x 7 days x No. of years of service / 30.
DeleteVisa and labour permit cancellation should take only days provided you have signed a visa / labour cancellation paper issued from the Ministry of Labour. Final settlement should be provided immediately upon signing the labour permit cancellation.
Gratuity will be calculated from your Basic Salary x 7 days x No. of years of service / 30.
DeleteVisa and labour permit cancellation should take only days provided you have signed a visa / labour cancellation paper issued from the Ministry of Labour. Final settlement should be provided immediately upon signing the labour permit cancellation.
May I pleased be enlightened whether or not an employee who was forced to resign at the time he was just simply handing-over the vacation leave application month before reaching one year, should also be entitled for gratuity pay despite not reaching 1 yr total number of working days but reached more than one year of his contract?
ReplyDeleteIs gratuity pay computation based on the 1 yr ACTUAL NUMBER OF WORKING DAYS /REPORTED DAYS or SIMPLY 1 YR OF THE CONTRACT?
Can other queries be also entertained in relation to other labor law related issues?
Exec Sec-- May I please be informed and enlightened with regard to computation of gratuity pay. Is it based on the ACTUAL NUMBER OR WORKING DAYS /REPORTED DAYS or simply 1 YR until the last date of your notice period in cessation of reporting?
ReplyDeleteMay I also inquire on some other labor related issues ? The time I handed over my vacation leave I was instead forced to resign no written proof of such force but only verbally so ordered,in so doing I tendered my resignation letter.After notice period is over, the agreement that he will waive rcruitment expense and ticket back home was not followed.Could there be any chance to fight for this case?
Thank you.
Accdg. to UAE Federal Law 1980, Art 132 says, A worker who has completed one or more years of continuous service shall be entitled to severance pay at the end of his employment. The days of absence from work without pay shall not be included in calculating the period of service.
DeleteThere will be a chance if you could provide any proof that you employer agreed to waive the recruitment expense and provide ticket back home. A testament from your fellow colleague can be served as a proof if they can testify willingly.
Gratuity computation should be monthly Basic Salary x 12 / 365 x 7 days
ReplyDeleteGratuity computation should be monthly Basic Salary x 12 / 365 x 7 days
ReplyDeleteIn UAE, gratuity or end of service or severance pay as they call is calculated as:
Deletebase salary x days (depending on the no. of years of service provided)
our company will going to close how much shall I get. What are the benefits should I get... thanks
ReplyDeleteThe questioner is entitled of at least a month salary, gratuity pay, and air ticket back home.
DeleteHi My name id Don , i need to know if a public holiday ( Eid Holidays ) falls between my leave will these public haolidays will deducted from my anuual leave. please give me an answer as per the uae law
ReplyDeleteAccording to the UAE Federal Law No. 8 of 1980, Art. 74, employees are entitled for an official holiday with full pay as per the days declared as holiday by the government. Hence, no deduction should be made.
Deletehi im lyn i work in a saloon for 2 years this coming june if ever im gonna renew how much the gratuity i can get from them and my vacation if im gonna go vacation they will pay?thanks...
ReplyDeleteHi Lyn,
DeleteGratuity is calculated on base salary only, any additional allowances are ignored.
Below is the original text of the UAE Federal Labour Law with the section on gratuity payments. Articles 132, 137, and 138 refer specifically to the calculation of gratuity.
Federal Law No 8, For 1980, On Regulation of Labour Relations
Chapter VII: Termination and Severance Pay
Section II: Severance Pay
Article 132
A worker who has completed one or more years of continuous service shall be entitled to severance pay at the end of his employment. The days of absence from work without pay shall not be included in calculating the period of service. The severance pay shall be calculated as follows:
21 days' wage for each of the first five years of service.
30 days’ wage for each additional year of service provided always that the aggregate amount of severance pay should not exceed two year's wage.
So, if you are unlimited contract holder, and employed between 1-3 years - the gratuity amount will be 7 days for each year of employment.
Regarding your vacation, the law says:
Annual leave is a basic right of a labour guaranteed by the UAE Labour Law. Article 75 of the UAE Labour Law states that: The employee must be granted an annual leave during each year of service which may not be less than:
i) Two days per month in respect of any employee with more than six months and less than one year of service.
ii) Thirty days per annum in respect of any employee whose period of service exceeds on year. In the event of termination of an employee’s service he shall be entitled to an annual leave for the fractions of the last year of service.
Therefore, the Company cannot deduct the accommodation allowance during annual leave as per the above mentioned Article 75 of the UAE Labour Law. However, the company is only authored to deduct transportation allowance during annual leave if provided.
hi im lyn im gonna be 2years here this coming june if ever i will renew how much is my gratuity i work in a saloon thanks..
ReplyDelete