UAE Gratuity 2018 for Limited and Unlimited Contracts


Gratuity calculator uae 2018 is available on our blog now, employees (workers) working in any part of UAE can easily calculate UAE gratuity 2018 online on our blog by following UAE Gratuity Formula.

Gratuity Calculation as per UAE Labour Law 2018

Calculate your Gratuity Online by clicking below Link

Are you planing to leave job in 2018 or looking to change company in upcoming days, if your answer is yes, we got you covered with this simple guide on "How to Calculate Gratuity as per UAE Labour Law in 2018".

Gratuity for UAE Free Zone Companies:
Gratuity Calculator for Free Zone companies in Dubai is also available, check out below link to visit official website to calculate your Gratuity online.
Please note that Rules for calculation of gratuity will be same as mention in below guide.

As per our experience and received queries, we came to know that some of UAE expats (workers) are unaware of latest gratuity rules in uae.

This Article is to guide you step by step regarding how to calculate gratuity in 2018 in case of Resignation or Termination.
Before beginning to guide please keep in mind that the Gratuity calculation is based on Resignation and Termination and will only be calculate by BASIC SALARY of worker.
Please note that calculation of gratuity is depends up to your contract type also.

What Is the difference between Resignation and Termination?
Resignation means if employee (worker) quit or leave a job before completing contract while Termination means where company (employer) terminate an Employee (worker) or cancel his/her employment contract.


Gratuity for Less than 1 Year:
As per UAE LABOUR Law Article 132, Section 2, if worker Resigns with less than a year of service, he will not get any gratuity.
Please keep in mind that gratuity is only applicable when an employee completes one year of service with a company.

Gratuity for more than 1 & Less than 3 Years:
If worker Resigns and he worked between 1-3 Years he should take 1/3rd of 21 days of basic salary for each year of employment.

Gratuity for more than 3 & Less than 5 Years:
If worker Resigns and he work more than 3 but less than 5 years, he should take 2/3rd 21 days for every year of worked.

Gratuity for more than 5 Years:
Resignation under Unlimited Contract after 5 years, worker should take 21 days basic salary for every year he/she worked and 30 days basic salary for additional years.  (if work with same company above 5 years).

What if Company Terminates the Employee?
In case of Unlimited contract where the company terminates the worker, 21 days of wages from minimum 1 and maximum 5 years should be paid to Employee, if employee worked for more than 5 years, he/she will be eligible for 30 Days of Basic wage for each year of worked.


Gratuity for Limited Contracts are slightly different from Unlimited Contracts.
1/3rd and 2/3rd system does not apply under limited contract.

Gratuity without Completing Contract:
It is clearly mentioned in UAE LABOUR Law Article 138 that If employee have not completed his/her Limited Contract period as signed in Agreement, he/she will not be eligible for any Gratuity.
In simple words, if someone signed a contract for 2 years but resigned after 6 months, 12 months or 14 months, company will do not pay any gratuity to that worker.

Gratuity for 1-5 Years of work in UAE:
If you have completed your limited contract and it is within 1 to 5 years, you are entitled for 21 day’s basic salary wage for every single year of work.

Gratuity for more than 5 Years of work in UAE:
If you have completed 5 years of continuous service with your company and have resigned contract, then for the first 5 years of work you are eligible for 21 days’ basic wage & for the service above 5 years, you will get paid 30 day’s basic wage for every year of service.

What if Company Terminates the Employee under Limited Contract?
In case you have been terminated by your Employer or Company and you have not completed your 1 year yet, you will not eligible for any gratuity, but if worked with the company for more than 1 year and less than 3 years, you will get 30 days of basic salary for No. of years your served before termination.

Frequently Asked Questions about Gratuity Calculation

Q: Can company deduct any payment from the gratuity payable to the worker?
Yes, the company (employer) may deduct any amount due and payable to the employee (worker) to the employer (company) from his/her gratuity payment and pay for the balance to the employee.
If there is any dispute between worker and company for gratuity payment or amount payable to the company, such case should be put to the Labour office (mohre) for investigation.

Q: Shall an employee be entitled to gratuity if he/she died?
In the event of a worker’s death, the employer (company) must pay the end-of-service gratuity to employee beneficiaries (heirs).

Q: What is the maximum Gratuity that we can get?
As per UAE LABOUR LAW, Article 132, maximum gratuity amount for employee cannot exceed 2 years’ gross salary.

Q: Can I get 3-month salary in case of termination?
Yes, if you are terminated for reason other than mentioned in UAE LABOUR LAW Article 120, you are eligible for 3 month’s compensations.

Q: What is the worker entitled to at the termination of his/her contract?
The worker (employee) at the termination of his/her employment contract will be entitled for to the following:

1: A notice period, or any amount due in lieu of the notice period, only in case of unlimited contract.
2: Compensation (payment/reward) for the unreasonable dismissal if the contract was terminated by the company (employer) for unreasonable cause, only in-case of unlimited contract.
3: If employee is working under limited contract, compensation equivalent to the period until the end of the contract, or three month's salary whichever is greater.
4: Payments equivalent to the balance of unutilized leave or any part thereof.
5: Payments for overtime or any other pending balance or salary.
6: End of service benefits, gratuity.
Q: What does gratuity mean in terms of compensation?
An employee who completes 1 year or more in continuous service shall be entitled to gratuity at the end of the his/her service.

The gratuity shall be calculated as follows:

1: 21 day's wages for each year of the first 5 years.
2: 30 day's wages for each additional year on condition that the total of the gratuity shall not exceed the wages of 2 years.

How to Calculate gratuity in 2018?
Gratuity will be calculated on an annual basis, if the employee (worker) has completed 1 year of employment with the company (employer) or more.

Q: Will absence be calculated in Gratuity?
The day of absence from work without pay shall not be included in calculating the time period of service. However, if the employee (worker) completed 1 year in service he/she will be entitled to a gratuity for the fraction of the year proportional for the part of the year he spent in company if he has completed 1 year in continuous service.

Q: Explain End of Service Benefits (Gratuity) in simple words:

1: If the worker resigns of his or her own free will (resignation) before completing 1 year, then they will not be entitled to any gratuity pay.
2: Worker (employee) is entitled to a gratuity for the served fraction of a year, if he completes 1 year of continuous service.
3: The End of Service Gratuity will calculate on the basis of last salary which the employee (worker) was entitled to, namely the basic salary. But it will not include allowances such as Accommodation, conveyance, utilities, furniture etc.
4: If the employee (worker) owes any money (loan, advance salary) to the company (employer), the company may deduct the amount from the employee's gratuity.

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  1. I am on unlimited contract. Currently working in Abu Dhabi. I need to clarify something:

    1. At present, I am currently 11 years more working in my company. Since our visa is 2 years only, If I don't want to continue anymore my employment, what are the lawful actions that I need to do?

    2. Is it possible, aside from the gratuity that I will receive. The 10 National Holidays which the company not paid me but I worked for that. Am I eligible to get also that payment?

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  3. hi im majo im here in the philippines i didnt resign or either terminated & visa is just expired thats shy im still here. do i get my gratuity even im here in tje philippines

  4. ive been working for 6 years and company states that if i didnt get there by the date they are given they will terminate and take my gratuity, do you take its fair enough.

  5. Amazing post and also great suggestions! This publish is very beneficial and great for us. Thanks for discussing valuable details.

  6. hi my name tna i finished unlimited contract and completed my visa 2nd march 2018.
    i placed official letter before 30days from my visa expired date. and approved by GM. but now my GM told me i don have rite tro ask graduity and annual leave salary as per labor law because they didnt give annual leave salary when we go vocation. also he told me i have only 7days to change status visa. my new company refused for 7days because they need open new quota or cancel quota 1st before apply visa and they need see my work. please help me for this problem. My GM said he can cancel me without my sign and he said he knew very well law his working in imigration with 3stars he said like that and he blame the person from labor office who gave me information is wrong and dont knew the law


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