Dubai worker wants to know how end of service gratuity would be calculated

For the past four years I have been working in a com­pany in Dubai. I would like to know how the end of service gratuity will be calculated and what happens if I resign. Is it correct that it is 21 days’ salary and if I resign after four years of working will the company still pay it to me? RF, Dubai

Article 133 of UAE Labour Law states: “The employee who has completed one year or more in the continuous service is entitled to the end of service remuneration at the end of his service. Days of absence from work without pay are not included in computing the period of service, and the remuneration is to be calculated as follows: 1. Twenty-one days’ pay for each year of the first five years of service. 2. Thirty days’ pay for each additional year.” The maximum amount payable is equivalent to two years’ salary. If, however, an employee resigns having worked for a company for less than five years, the amount payable is reduced.

In this scenario this extract from Article 137 of Labour Law is relevant: “If the period of his continued service is more than three years and less than five years he becomes entitled to 2/3 of the said gratuity.” The calculation is based on the basic salary only. All calculations are pro-rated dependent on exact length of service and payment of the end of service benefit by an employer is not optional.


Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE.

The advice provided in our columns does not constitute legal advice and is provided for information only.

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