According to the UAE Labor Law, employees of UAE companies are entitled to certain benefits upon the end of their work with these companies. The legislation provides for the following benefits:
- a notice period;
- payment for the unused vacation days;
- payment for extra hours;
- compensatory payments in case of early dismissal;
- end of service gratuity.
Foreign citizens working in the UAE may also benefit from repatriation expenses, according to the UAE Employment Law.
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What is the end of service gratuity for Dubai employees?
Under the employment legislation, the end of service gratuity is defined as the amount of money an employee is entitled once their contract with a company has come to an end. However, in order to receive the gratuity, the employee must have at least 12 months of continuous work rendered for the employer.
The end of service gratuity in Dubai is granted as it follows:
- the remuneration for 21 days for each year of employment for the first 5 years;
- the remuneration for 30 days for each year of employment for more than 5 years.
The maximum end of service gratuity is 2 years, provided that the employee has been working for 26 continuous years for the Dubai company. Also, the end of service gratuity is paid without taking into consideration any allowance, bonus or other benefits. Only commissions are included in the end of service gratuity. These payments also apply to foreign citizens working in Dubai.
Our agents in Dubai can provide with more information about the Employment Law in the UAE with respect to the end of service gratuities.
Reduced end of service gratuity in Dubai
Companies in Dubai also pay reduced end of service gratuities to their employees which are calculated based on the worked period of time. This type of gratuity payment is usually made in case the employee resigns. Employees with less than a year and no more than 3 years on the job will receive 1/3 of the gratuity. Employees with more than 3 years and less than 5 years will be entitled to 2/3 of the end of service gratuity.
For complete information about the calculation of end of service gratuities in the UAE, do not hesitate to contact our agents in company formation in Dubai.