UAE in a new change announced that private sector gratuity will not include unpaid leave days. According to MoHRE, the end-of-service gratuity is calculated based on the final basic salary of the employee.
“A full-time employee in the private sector who has completed a year or more of continuous service is entitled to an end-of-service gratuity at the end of their service, however, unpaid leave days are not included in calculating the gratuity,” the UAE Ministry of Human Resources and Emiratisation (MoHRE) said in a Twitter post.
How to calculate your end-of-service benefits:
- In order to be eligible for gratuity, an employee must have completed at least one year of continuous service with the employer.
- In case an employee has been recorded as absent without pay, it shall not be included in the gratuity calculation during the period of service.
- The end-of-service gratuity is calculated based on the final basic salary of he employee.
- Gratuity is calculated according to working days (unpaid leave days are excluded), provided one year of continuous service is completed.
- For the first 5 years of employment, the employee is entitled to 21-day salary for each year served.
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In all cases, the total gratuity shall not exceed the wage of two years.
However, when calculating gratuity, the employee must also ensure the nature of their employment contract — limited or unlimited.
In a limited contract, “an employee is not entitled to an end of service gratuity if he resigns with fewer than 5 years of service. If he has over 5 years of service, he is entitled to the same end of service gratuity as if he resigned on an unlimited contract,” UAE law firm Al Tamimi & Co said.
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