Ever wondered how much “end-of-service gratuity” you’re entitled to in the UAE? This sum is a significant financial benefit employees receive after completing their contract or leaving a job. But is there a limit to how much gratuity you can get? Absolutely! Let’s break down the essential details in a clear and simple way:
The Maximum Gratuity Limit: 2 Years of Your Total Salary
That’s right, the maximum gratuity you can receive in the UAE is capped at two years of your total salary. This applies regardless of your years of service, position, or company. So, if you earn 10,000 AED per month, the maximum gratuity you can expect is 240,000 AED (10,000 AED/month x 24 months).
Calculating Your Gratuity:
The amount you receive depends on your basic salary and length of service:
- For the first 5 years: You get 21 days of basic salary for each year of service.
- After 5 years: You get 30 days of basic salary for each year beyond the first 5.
Example: If you worked for 3 years with a basic salary of 5,000 AED, your gratuity would be:
- 3 years x 21 days of basic salary/year = 63 days
- 63 days x 5,000 AED/day = 315,000 AED
However, remember the 2-year cap! If this calculation exceeds that limit, your gratuity will be adjusted down to match the maximum.
Important Points:
- This applies to private sector employees in the UAE.
- The gratuity is tax-free.
- Your employer is legally obligated to pay your gratuity within 45 days of your final work day.