# Annual Gratuity



## DmE (May 29, 2008)

Hi,

I've been reading these posts with interest and I'm considering an offer to work in Abu Dhabi.

My questions relates to "annual gratuities" - some posts say they are standard and others don't.

What are they? Are they standard? Do they just apply to companies based in UAE as opposed to multi-nationals?

I've have seen some say 10% per annum and others saying 1 months salary for years 1-3 and then 1.5 months salary thereafter.

Sounds like some sort of bonus to me....

feedback appreciated...


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## flossie (Jun 9, 2008)

The gratuity is something that generally has to be paid by law. It's in lieu of a pension and it's something you receive at the end of your service. It's 21 days basic salary for the first 5 years of service and 30 days after that, but it cannot exceed 2 year (?) salary. If you resign, you're not neccessarily entitled to the whole lot. If you resign within a year, you're not entitled to any of it. If you do a google search on end of service gratuity UAE or something, you will get more reliable info. It's on the Ministry of Labour's website, I think. Also, if a company provides you with a pension fund, they may not have to pay you the end of service gratuity if that pension fund ends up being worth more than the gratuity would be. This is why so many packages are split into allowances, as the allowances are not included in the calculation of End of Service gratuity.

Sorry about the rambling response, but I'm not meant to be here, I'm on my way out.


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## DmE (May 29, 2008)

thanks for that flossie.

There is no reference to this in the contract i have been given. The company is Dutch. Should i insist on its inclusion?


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## flossie (Jun 9, 2008)

Maybe you should ask why it isn't included? Maybe it's not included because it's 'law' and don't think it needs to be? Or do they offer some sort of pension plan? DH's contract state 'end of service gratuity will be provided at 21 days per year for first 3 years and 30 days for each year after as per Ministry of Labour law'. Something like that, can't recall of the top of my head. DH's company is european, so I don't think that your company being Dutch should be an issue. Look up the Minsitry of Labour's website and see what you can find there. The whole thing is in writing on there somewhere.


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## flossie (Jun 9, 2008)

Also, do you know where your office is as I have heard it may differ from free zone to free zone. I'm sure that everywhere has a gratuity, I think it might be the resignation rules that might differ. I'm actually not 100% sure if it even does differ, but I've been told it does. I'm sorry I can't give you information that I know to be 100% accurate, but at least I have hopefully given you a rough guide.


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