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UAE Gratuity Calculation - Limited Contract
UAE Gratuity Calculation - Limited Contract

How is gratuity calculated in the UAE for a limited contract

Yohann Allen avatar
Written by Yohann Allen
Updated over 2 years ago

As per the UAE labor law, gratuity calculation is done based on the type of contract under which the employee was employed.

This article explains how to calculate gratuity for a limited contract i.e. a contract with an end date. Gratuity calculation for an unlimited contract is explained here.

Less than 1 year of service

Leaving work before completing one (1) year of service means that you are not entitled to any gratuity pay.

Between 1 year and 5 years of service

Employee is entitled to full gratuity pay based on 21 days salary for each year of work.

E.g. Employee with a basic salary AED 10,000 who has completed one year of work

10,000/30 = AED 333.33

AED 333.33*21*1 = AED 7,000

5 or more years of service

Employee is entitled to full gratuity pay based on 30 days salary for each year of work.

E.g. Employee with a basic salary AED 10,000 who has completed five years of work

10,000/30 = AED 333.33

AED 333.33*30*5 = AED 50,000

Note: These calculations are not to be treated as law, they are for your reference only. For any disputes or further clarification, contact the UAE Ministry of Human Resources and Emiratization.

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