EOSB/End of Service Benefits or Gratuity is a sum of money paid to an employee at the end of a period of employment

### Calculations for Limited Contract gratuity pay in UAE

- Less than 1 year of service : No gratuity
- Between 1 year and 5 years of service : 21 days salary
- 5 or more years of service :30 days salary

**Example: An employee who has a BASIC SALARY of 10,000/- resigned after 2 years of work**

=BASIC x 12 (months in a year) / 365 = Daily wage X 21 (days pay as per law)

=10,000 X 12 / 365 = 328.7671 x 21 = 6,904.11 (This is for one year)

= 6,904.11 x 2 (years worked) = 13,808.22 (Gratuity for 2 years of work)

### Calculations for Unlimited Contract gratuity pay

- Less than 1 year of service : No gratuity
- Between 1 year and 3 years of service : One third (1/3) of the 21-days gratuity pay.
- Between 3 years and 5 years of service: Two third (2/3) of the 21-days gratuity pay.
- 5 or more years of service :Full 21-days gratuity pay.

**Example-01: An employee who has a BASIC SALARY of 10,000/- resigned after 2 years of work**

=BASIC x 12 (months in a year) / 365 = Daily wage X 21 (days pay as per law) / 3 (1/3rd of 21 day’s pay)

=10,000 X 12 / 365 = 328.7671 x 21 = 6,904.11 / 3 = 2,301.37 (This is for one year)

= 2,301.37 x 2 (years worked) = 4,602.74

**Example-02: An employee who has a BASIC SALARY of 10,000/- resigned after 4 years of work**

=BASIC x 12 (months in a year) / 365 = Daily wage X 21 (days pay as per law) X 2/3 (2/3rd of 21 day’s pay)

=10,000 X 12 / 365 = 328.7671 x 21 = 6,904.11 x 2/3 = 4602.74 (This is for one year)

= 4602.74 x 4 (years worked) = 18,410.96

**Example-03: An employee who has a BASIC SALARY of 10,000/- resigned after 4 years & 3 months (Jan, Feb & Mar) of work**

=BASIC x 12 (months in a year) / 365 = Daily wage X 21 (days pay as per law) X 2/3 (2/3rd of 21 day’s pay)

=10,000 X 12 / 365 = 328.7671 x 21 = 6,904.11 x 2/3 = 4602.74 (This is for one year)

= 4602.74 x 4 (years worked) = 18,410.96

**Calculating for those extra 3 months worked:**

= 4,602.74 (2/3 rd pay for one year’s work) / 365 = Pay Per day

= 4,602.74 / 365 = 12.61

= 12.61 x 90 days (Jan=31 + Feb=28 + Mar=31)

= 1,134.92 (for Three months worked)

Therefore, for 4 years and 3 months worked you get 18,410.96 + 1,134.92 = **19,545.88**

**Note**

- Gratuity pay is calculated based on the most recent salary paid into your account.
- Gratuity is calculated based on your BASIC salary
- If you are terminated from your job, unless you break the rules as stated in
**Article 139** of the Labour Law, the employee **is still entitled to gratuity pay**.

*Click here for UAE Labour Law: end of service gratuity*

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