In the United Arab Emirates (UAE), end-of-service gratuity is a statutory benefit provided to employees upon the termination of their employment, provided they have completed at least one year of continuous service. This gratuity is a financial reward for the employee's service duration and is calculated based on specific criteria outlined in the UAE Labour Law. Various governmental bodies have developed online gratuity calculators to facilitate the accurate and efficient computation of this benefit.
End-of-service gratuity is a lump-sum payment that employers are legally obligated to provide to eligible employees at the end of their employment term. The calculation of this gratuity is governed by the UAE Federal Decree Law No. 33 of 2021, which stipulates the following:
It's important to note that any unpaid leave days are excluded from the total service period when calculating gratuity.
Governmental Gratuity Calculators
To assist both employers and employees in accurately determining end-of-service benefits, several UAE governmental entities have developed online calculators:
For government employees in Dubai, the DGHR offers an end-of-service benefit calculator. Employees can input their joining date, expected end-of-service date, total days of unpaid leaves, and basic salary to estimate their gratuity.
Alternative End-of-Service Benefits Scheme
In an effort to enhance employee benefits and align with global best practices, the UAE has introduced a voluntary savings scheme as an alternative to the traditional end-of-service gratuity system. This scheme allows employers to contribute to a savings fund on behalf of their employees, providing them with the opportunity to earn investment returns on their end-of-service benefits. Employees retain the gratuity they earned before enrolling in the scheme, and the new system applies to earnings from the date of registration onward.
Understanding and accurately calculating end-of-service gratuity is crucial for both employers and employees in the UAE. Governmental online calculators serve as valuable tools to estimate these benefits, promoting transparency and compliance with labor laws. With the introduction of alternative savings schemes, employees now have more options to secure their financial future post-employment.
For more detailed information and to access the gratuity calculators, please refer to the following official resources:
By leveraging these tools and staying informed about legal provisions, stakeholders can ensure fair and accurate end-of-service benefit practices in the UAE.