Gratuity Calculation in the UAE

For each year of service under a short-term contract that is less than 5 years. However, if the employee has been operating for the company for less than a year, they are not eligible for gratuity. On the other hand, for each year of work above 5 years, a worker gets 21 days of income, with a limit of 2 years’ salary.

Knowing who The computation of gratuities for unlimited contracts varies depending on the circumstances and the number of years of service. For instance, if the worker resigns after 1 to 3 years of service, they receive 1/3rd of the 21-day basic wage for every year. However, if the employer terminates them they receive full payment.

Knowing the minimum wage is necessary. This is the base pay for an employee, not including any bonuses, compensation, housing, transportation, or other perks. Gratuity will always be calculated using the employee's base pay.

You can figure out the daily wage once you have the basic income. The basic income can convert to a daily wage by dividing it by 30 (the average number of days at work in a month). You can now determine the gratuity according to the type of contract and the number of years of service. In this case, you would basically have to multiply each day's compensation by the appropriate number of days if the worker is bound by a short-term or renewable contract.