End Of Service Calculation Abu Dhabi

Abu Dhabi End-of-Service Gratuity Formula:

\[ Gratuity = (Last\ Salary \times \frac{21}{30} \times First\ 5\ Years) + (Last\ Salary \times \frac{30}{30} \times Additional\ Years) \]

Gratuity (AED):

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1. What is Abu Dhabi End-of-Service Gratuity?

The Abu Dhabi End-of-Service Gratuity is a financial benefit provided to employees upon termination of their employment contract, calculated according to UAE labor law. It serves as a form of severance pay based on the employee's final salary and years of service.

2. How Does the Calculator Work?

The calculator uses the Abu Dhabi gratuity formula:

\[ Gratuity = (Last\ Salary \times \frac{21}{30} \times First\ 5\ Years) + (Last\ Salary \times \frac{30}{30} \times Additional\ Years) \]

Where:

\( Last\ Salary \) — Final basic salary in AED per month
\( First\ 5\ Years \) — Service period up to 5 years
\( Additional\ Years \) — Service period beyond 5 years
\( \frac{21}{30} \) — Gratuity rate for first 5 years (21 days per year)
\( \frac{30}{30} \) — Gratuity rate for additional years (30 days per year)

Explanation: The calculation differentiates between the first 5 years of service (21 days salary per year) and additional years (30 days salary per year) as per UAE labor law provisions.

3. Importance of Gratuity Calculation

Details: Accurate gratuity calculation is essential for both employers and employees to ensure legal compliance and fair compensation upon employment termination. It represents a significant financial entitlement for long-serving employees.

4. Using the Calculator

Tips: Enter the last basic salary in AED per month and total years of service. The calculator will automatically apply the correct formula based on whether service exceeds 5 years or not.

5. Frequently Asked Questions (FAQ)

Q1: What is included in "last salary" for gratuity calculation?
A: Only the basic salary is used for gratuity calculation. Allowances, bonuses, and other benefits are typically excluded unless specified in the employment contract.

Q2: How are partial years calculated?
A: Partial years are calculated proportionally. For example, 3 years and 6 months would be calculated as 3.5 years in the formula.

Q3: Is gratuity payable for service less than 1 year?
A: No, employees must complete at least 1 year of continuous service to be eligible for end-of-service gratuity under UAE law.

Q4: Are there different rules for different employment types?
A: Yes, limited contract and unlimited contract employees may have different gratuity calculation rules. This calculator follows the standard Abu Dhabi provisions.

Q5: What if employment is terminated for cause?
A: Gratuity entitlement may be affected or forfeited in cases of termination for gross misconduct as specified in UAE labor law.