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UAE Final Settlement Formula:
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The Final Exit Benefit is the end-of-service gratuity payment for expatriate employees in the UAE, calculated based on the employee's last salary and total days worked, providing a half-month salary equivalent as settlement.
The calculator uses the UAE final settlement formula:
Where:
Explanation: The formula calculates a half-month salary equivalent based on the proportion of days worked relative to a standard 30-day month.
Details: Accurate final settlement calculation is crucial for ensuring fair compensation upon employment termination, complying with UAE labor laws, and proper financial planning for both employers and employees.
Tips: Enter last monthly salary in AED, total days worked. All values must be valid (salary > 0, days worked between 1-365).
Q1: Who is eligible for final exit benefit?
A: Expatriate employees who have completed at least one year of continuous service are eligible for end-of-service benefits under UAE labor law.
Q2: Are there different calculation methods for different service periods?
A: Yes, the calculation varies based on years of service - full benefit for 5+ years, reduced rate for 1-5 years, and no benefit for less than 1 year.
Q3: What components are included in "last salary"?
A: Basic salary plus all regular allowances, but excluding overtime, bonuses, and other irregular payments unless specified in employment contract.
Q4: How are partial years calculated?
A: Partial years are calculated proportionally based on the actual number of days worked during the final year of service.
Q5: Is the benefit taxable?
A: No, end-of-service benefits are generally not subject to income tax in the UAE as there is no personal income tax system.