Mohre Calculation Of End Of Service

MOHRE Gratuity Formula:

\[ Gratuity = Basic \times (21/30 \times First 5 Years + 30/30 \times Additional) \]

Gratuity (AED):

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1. What is MOHRE UAE Gratuity?

The MOHRE (Ministry of Human Resources and Emiratisation) gratuity is an end-of-service benefit provided to employees in the UAE private sector upon termination of employment. It is calculated based on the employee's basic salary and years of service.

2. How Does the Calculator Work?

The calculator uses the MOHRE gratuity formula:

\[ Gratuity = Basic \times (21/30 \times First 5 Years + 30/30 \times Additional) \]

Where:

\( Basic \) — Basic salary in AED per month
\( First 5 Years \) — Service period up to 5 years
\( Additional \) — Service period beyond 5 years
\( 21/30 \) — Gratuity rate for first 5 years (21 days per year)
\( 30/30 \) — Gratuity rate for additional years (30 days per year)

Explanation: The formula calculates gratuity based on 21 days' basic salary for each year of the first 5 years, and 30 days' basic salary for each additional year beyond 5 years.

3. Importance of Gratuity Calculation

Details: Accurate gratuity calculation is essential for both employers and employees to ensure compliance with UAE labor law and fair compensation upon employment termination.

4. Using the Calculator

Tips: Enter basic salary in AED per month and total years of service. All values must be valid (basic salary > 0, years between 0-50).

5. Frequently Asked Questions (FAQ)

Q1: What is included in basic salary for gratuity calculation?
A: Basic salary typically excludes allowances such as housing, transportation, and other benefits. Only the fixed basic salary component is used.

Q2: How is gratuity calculated for service less than 1 year?
A: For service less than 1 year, no gratuity is payable unless specified in the employment contract or company policy.

Q3: What happens if employment is terminated before 5 years?
A: If employment is terminated before completing 5 years, gratuity is calculated at 21 days' basic salary for each year of service.

Q4: Are there different rules for limited and unlimited contracts?
A: Yes, gratuity calculation may vary between limited and unlimited contracts. This calculator follows the standard MOHRE guidelines.

Q5: Is gratuity taxable in the UAE?
A: No, gratuity payments are not subject to income tax in the UAE as there is no personal income tax system.