Gratuity Calculator in UAE

The gratuity amount is determined by factors such as the length of service and the employee's last drawn salary.
By using a gratuity calculator, employees can estimate their entitlement, ensuring transparency, and clarity in the process. This helps employees plan their finances more effectively.

Gratuity- What is It?

Gratuity recognises and appreciates an employee’s contribution over the years, offering financial support as they transition to the next life phase.

The amount of gratuity is calculated based on multiple factors. Generally, employees become eligible for gratuity after completing a minimum period of continuous employment, often one year. Gratuity serves as financial support, helping employees manage expenses or invest for future needs.

What is a Gratuity Calculator?

A gratuity calculator in Dubai is an online tool designed to help employees estimate their end-of-service benefits based on their tenure and salary. As mentioned above, gratuity is a statutory payment provided to employees who have completed at least one year of continuous service. The calculation takes into account the Basic Salary, Years of Service, and Employment Type.

For employees with less than five years of service, gratuity is calculated as 21 days of basic salary of each year of service. For those exceeding five years, the calculation includes 30 days of basic salary per year beyond the initial five years.

The gratuity calculator streamlines this process by providing instant results, ensuring transparency for both employees and employers. It contributes to wise financial planning.

Are You Eligible to Get a Gratuity?

The eligibility criteria for gratuity are generally outlined by labour laws, and in the UAE, it is governed by the UAE Labour Law. Employees are entitled to gratuity under specific conditions, which include the following:

Continuous Employment

The employee must have completed at least one year of continuous service with the employer. Gratuity is not applicable for employees who have worked for less than a year.

Type of Employment Contract

Gratuity is calculated differently for employees under limited contracts and unlimited contracts:

• Limited Contract: Employees are eligible for gratuity upon the completion of the contract term
• Unlimited Contract: Eligibility depends on the duration of service and the reason for termination

Reason for Termination

Resignation impacts eligibility, especially under an unlimited contract, as gratuity entitlement may be reduced based on years of service.

Years of Service

The gratuity amount is calculated based on the total number of years served:

• 1-3 years: Partial gratuity entitlement (under an unlimited contract)
• 3-5 years: Higher entitlement
• 5+ years: Full entitlement (21 days' basic salary for each year of the first 5 years and 30 days' basic salary for each additional year)

By meeting these conditions, employees can ensure they receive gratuity upon ending their employment.

How to use a gratuity calculator?

Mentioned underneath are the steps to calculate gratuity using a gratuity calculator easily available online:

1. Enter the basic salary as well as the dearness allowance if applicable.
2. Enter the number of years served in the company.
3. The gratuity calculator uses the formula to calculate your gratuity amount in mere seconds.
4. One can easily recalculate their gratuity as many times as they like by simply changing the input data.

What are the Benefits of a UAE Gratuity Calculator?

Mentioned below are the advantages of the gratuity calculator UAE:

Accurate Gratuity Estimation

Using the calculator gives you an estimation of the end-of-service gratuity based on salary and tenure.

 Saves Time & Effort

Manually computing gratuity may result in calculation errors and is time-consuming. An online gratuity calculator gives employees and employers instant results with just a few inputs.

Financial Planning

Employees can plan their future finances effectively by knowing their expected gratuity amount.

Transparency for Employees

The UAE gratuity calculator allows employees to understand their entitlements, ensuring their awareness of rights as per labour laws.

Helps Employers Budget Settlements

Companies can allocate funds for gratuity payouts efficiently, improving financial management.

User-Friendly & Easily Accessible

Calculate gratuity in UAE online at any time from anywhere across the globe.

Encourages Employee Retention

Employees gain clarity on long-term benefits, motivating them to stay longer in the organisation.

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