Basic wage versus full salary for gratuity
Should gratuity use my full salary with allowances?
The situation
The legal base is the last basic wage. Contracts can choose a wider base.
The law
- Art. 54, Labour Law No. 14 of 2004: Gratuity of at least three weeks of last basic wage for each year after one full year of service, pro rata for part years
What it means for you
If basic is QAR 5,000 and allowances are QAR 3,000, the law uses QAR 5,000. For 4 years: 5,000 x 12 / 52 x 3 x 4 = QAR 13,846. If the contract says total salary, use QAR 8,000.
What to do
- Read the gratuity clause in the contract.
- Use the basic wage unless the contract says otherwise.
- Compute the amount.
- Explain the basis to the employee.
We can do this for youEnd of service gratuity calculation and final settlement: QAR 500