How much will an Abu Dhabi worker with Dh1,600 basic salary get as end of service gratuity?

I work for a company in Abu Dhabi and earn a basic salary of Dh1,600 per month on an unlimited contract. I have now worked for them for four years and plan to resign. Can you tell me what my settlement amount will be? AN, Abu Dhabi

AN will be entitled to an end of service gratuity payment but this will be reduced from the full amount as he is resigning having worked for the company for less than five full years. As per Article 132 of UAE Labour Law, the standard gratuity is calculated on: “The wage of twenty one days for each of the first five years of service.” Article 137 goes on to say: “Should his continuous service be of three years at least and five years at most, he shall be entitled to two-thirds of the said gratuity.” This equates to 14 days basic salary for each year of service.

Assuming he works exactly four years, and has had no days where he has been absent without pay, the calculation gives a figure of Dh2,945. If actual time worked is more than four years by the time the notice period has been completed then the figure should be calculated pro rata, per Article 133. Any days of annual leave accrued but not taken should also be paid in full with the final salary payment and the end of service gratuity.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 20 years experience. Contact her at [e-mail]. Follow her on Twitter at @FinancialUAE.

The advice provided in our columns does not constitute legal advice and is provided for information only.

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