1. What Are UAE End of Service Benefits?

End of Service Benefits, also known as gratuity, are financial entitlements provided to employees in Abu Dhabi and across the UAE upon termination of employment. These benefits are calculated based on the employee's basic salary and years of service, serving as a form of retirement or severance payment.

2. How Does the Calculator Work?

The calculator uses the UAE end-of-service gratuity formula:

Where:

• \( Basic\ Salary \) — Employee's basic salary in local currency
• \( Years \) — Total years of service with the employer
• \( 21 \) — Standard divisor for daily wage calculation
• \( 1.25 \) — Multiplier for UAE gratuity calculation

Explanation: The formula calculates the daily wage by dividing basic salary by 21 (average working days per month), multiplies by years of service, and applies the standard UAE gratuity multiplier of 1.25.

3. Importance of End of Service Calculation

Details: Accurate calculation of end-of-service benefits is crucial for both employers and employees to ensure compliance with UAE labor laws and fair compensation upon employment termination. It helps in financial planning and prevents disputes.

4. Using the Calculator

Tips: Enter the basic salary in your local currency and the total years of service. Ensure both values are positive numbers. The calculator will provide the estimated end-of-service benefits according to UAE labor regulations.

5. Frequently Asked Questions (FAQ)

Q1: Who is eligible for end-of-service benefits in Abu Dhabi?
A: All employees who have completed at least one year of continuous service are eligible for end-of-service benefits under UAE labor law.

Q2: Does the calculation differ for limited and unlimited contracts?
A: Yes, the calculation method may vary depending on the contract type and the reason for termination (resignation vs. termination by employer).

Q3: Are there different calculation methods for different service periods?
A: Yes, benefits are typically calculated as 21 days' basic salary for each year of the first 5 years, and 30 days' basic salary for each additional year.

Q4: What components are included in basic salary for this calculation?
A: Basic salary typically excludes allowances such as housing, transportation, and other benefits. Only the fixed basic salary component is used.

Q5: Can end-of-service benefits be paid in installments?
A: According to UAE law, end-of-service benefits should be paid in full upon termination, unless otherwise agreed upon by both parties.