How is the gratuity calculated for employees?
The gratuity is calculated based on various factors such as nationality, contract type, and the nature of separation (termination, resignation, or end of contract). Each case includes information on the employee’s basic salary, days of service, years worked, and the calculated gratuity amount according to specified formulas. The cases cover scenarios for both limited and unlimited contracts, addressing instances of termination, resignation, and end of contract.
Case:1
Employee’s Nationality: Other than GCC Nationals (Expats) Type of Contract: Limited Contract Type of Separation: Terminations, Resignations and End of Contracts
| Basic Salary per Month | Basic Salary per Day (BS) | Date of Joining | Last Working Day | Years of Service (N) | No. of Days | Our Calculated Gratuity | Gratuity Formula | |
|---|---|---|---|---|---|---|---|---|
| 20,000 | 667 | 03/08/2020 | 01/02/2021 | 0 | 182 | 0 | No Gratuity less than 1 year | < 1 Year |
| 30,000 | 1,000 | 04/08/2018 | 01/02/2021 | 3 | 912 | 52,418.493 | BS * 21 * N | < 5 Years |
| 50,000 | 1,667 | 01/02/2017 | 01/02/2021 | 4 | 1,461 | 140,123.91 | BS * 21 * N | < 5 Years |
| 80,000 | 2,667 | 01/02/2014 | 01/02/2021 | 7 | 2,557 | 440,274.205 | [ BS * 21 * 5 ] + [ BS * 30 * ( N - 5 ) ] | >= 5 Years |
Case 2:
Employee’s Nationality: Other than GCC Nationals (Expats) Type of Contract: Unlimited Contract Type of Separation: Termination
| Basic Salary per Month | Basic Salary per Day (BS) | Date of Joining | Last Working Day | Years of Service (N) | No. of Days | Our Calculated Gratuity | Gratuity Formula | |
|---|---|---|---|---|---|---|---|---|
| 20,000 | 667 | 03/08/2020 | 01/02/2021 | 0 | 182 | 0 | No Gratuity less than 1 year | < 1 Year |
| 30,000 | 1,000 | 04/08/2018 | 01/02/2021 | 3 | 912 | 52,418.493 | BS * 21 * N | < 5 Years |
| 50,000 | 1,667 | 01/02/2017 | 01/02/2021 | 4 | 1,461 | 140,123.91 | BS * 21 * N | < 5 Years |
| 80,000 | 2,667 | 01/02/2014 | 01/02/2021 | 7 | 2,557 | 440,274.205 | [ BS * 21 * 5 ] + [ BS * 30 * ( N - 5 ) ] | >= 5 Years |
Case 3:
Employee’s Nationality: Other than GCC Nationals (Expats) Type of Contract: Unlimited Contract Type of Separation: Resignation
| Basic Salary per Month | Basic Salary per Day (BS) | Date of Joining | No. of Days | Last Working Day | Years of Service (N) | Our Calculated Gratuity | Gratuity Formula | |
|---|---|---|---|---|---|---|---|---|
| 20,000 | 667 | 03/08/2020 | 182 | 01/02/2021 | 0 | 0 | No Gratuity less than 1 year | < 1 Year |
| 30,000 | 1,000 | 04/08/2018 | 912 | 01/02/2021 | 3 | 17,472.831 | BS * 7 * N | < 3 Years |
| 50,000 | 1,667 | 01/02/2017 | 1,461 | 01/02/2021 | 4 | 58,408.94 | [ BS * 7 * 3 ] + [ BS * 14 * ( N - 3 ) ] | < 5 Years |
| 80,000 | 2,667 | 01/02/2014 | 2,557 | 01/02/2021 | 7 | 440,274.205 | [ BS * 21 * 5 ] + [ BS * 30 * ( N - 5 ) ] | >= 5 Years |
Note: However, if your employees who are expats working in the DFIC free zone, the gratuity calculation varies. Here’s how:
| Employee’s Nationality | Type of Contract | Type of Separation | Employer Contribution if < 5 Years | Employer Contribution if >= 5 Years | Basic Salary per Month | Date of Joining | Last Working Day | Years of Service (N) | No. of Days | Employer Contribution per Month | Monthly Contribution for Gratuity Formula | Gratuity Amount |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Other than GCC Nationals (Expats Working in Dubai - DIFC Free Zone) | Limited / Unlimited Contract | Termination / Resignation / End of Contract | 5.83% | 8.33% | 20000 | 03/08/2020 | 01/02/2021 | 0 | 182 | 0 | No Gratuity less than 1 year | No Gratuity |
| Other than GCC Nationals (Expats Working in Dubai - DIFC Free Zone) | Limited / Unlimited Contract | Termination / Resignation / End of Contract | 5.83% | 8.33% | 30000 | 04/08/2018 | 01/02/2021 | 3 | 912 | 1749 | Basic_Salary_per_Month * 5.83 / 100 | 1749 |
| Other than GCC Nationals (Expats Working in Dubai - DIFC Free Zone) | Limited / Unlimited Contract | Termination / Resignation / End of Contract | 5.83% | 8.33% | 50000 | 01/02/2017 | 01/02/2021 | 4 | 1461 | 2915 | Basic_Salary_per_Month * 5.83 / 100 | 2915 |
| Other than GCC Nationals (Expats Working in Dubai - DIFC Free Zone) | Limited / Unlimited Contract | Termination / Resignation / End of Contract | 5.83% | 8.33% | 80000 | 01/02/2014 | 01/02/2021 | 7 | 2557 | 6664 | Basic_Salary_per_Month * 8.33 / 100 | 6664 |