End of service gratuity in the UAE is a fundamental benefit for foreign workers, excluding temporary workers with less than one year of service. The calculation of gratuity pay is based on the employee's basic salary and length of service. For the first five years, an employee is entitled to 21 days' worth of basic salary for each year worked. After five years, this entitlement increases to 30 days' worth of basic salary per year.
To illustrate, if an employee with a basic salary of AED 3,000 worked for 3 years, their gratuity pay would be AED 6,300. Similarly, if the same employee worked for 7 years, the total gratuity pay would amount to AED 16,500. It is advisable to use an online gratuity pay calculator to estimate the amount before leaving the company.
Certain factors are excluded from the gratuity pay calculation, such as days of unjustified absence, overtime, and allowances. Part-time workers have a prorated calculation based on their total working hours compared to full-time employees. Employers are entitled to deduct from gratuity if employees have outstanding debts or legal dues.
The maximum gratuity amount an employee can receive should not exceed two years' worth of salary. It is essential for foreign workers to familiarize themselves with the gratuity calculation to ensure they receive the correct amount before their contract ends. Seeking clarification from HR or the Ministry of Human Resources and Emiratisation is recommended when in doubt.
