Gratuity after 4 years
An employee is leaving after 4 years with AED 8,000 basic salary. How much gratuity is due?
The situation
Gratuity is 21 days of basic wage for each of the first 5 years of continuous service. A day's wage is usually taken as basic monthly salary divided by 30.
The law
- Art 51, Federal Decree-Law 33 of 2021: End of service gratuity: 21 days basic wage a year for the first 5 years, 30 days after, capped at 2 years' wage
What it means for you
Daily basic = AED 8,000 divided by 30 = AED 266.67. For 4 years: 21 days times 4 = 84 days. Gratuity = 84 times AED 266.67 = about AED 22,400. Unused leave is paid separately. Under the current law, resignation does not cut gratuity the way the old law did, provided the legal conditions are met.
What to do
- Confirm the joining date and basic wage.
- Compute daily basic wage.
- Multiply by 21 days per year of service.
- Pay with the final settlement within 14 days.
We can do this for youPayroll compliance: WPS salary runs, end of service gratuity, final settlement and payroll records: AED 95