meta: Learn how to accurately calculate end-of-service gratuity for domestic workers in the UAE, including housemaids, nannies, drivers, and cooks.

United Arab Emirates is famous for its fast growing economy and ethnic cultural diversity; a good number of domestic workers are employed in the Emirati households. These workers, people from different countries, are instrumental to the daily success and sustenance of both Emirati and other expatriate families.

Gratuity as a form of protection is one of the vital legal measures available to domestic workers as they get an indemnity of a token of appreciation of the services they offer. It captures a form of remuneration that has the capacity to embrace the long years of service and dedication that is inevitable in most domestic workers.

Domestic workers in the UAE are protected by legislation on gratuity payable for domestic workers as provided under the Federal Law No. 10 of 2017 to improve the employment standards or rights across the country and enshrine a safe working condition for every worker. This legal safeguard requires the employer secure the payment dependent on the years served as a measure of security enhancing the welfare of the domestic workers upon exiting the job.

This blog features commonly asked questions Household Shepherd

regarding gratuity and how it is calculated for domestic workers according to the federal law 2017.

First let’s see which professions come in domestic worker domain.

Personal coach
Private tutor
Stableman Personal / Private Nurse
Personal Assistant
Labor worker
Cook
Private Agriculture Engineer
Personal Driver
Housekeeper

How to calculate gratuity for domestic workers in UAE

To calculate gratuity for domestic workers in the UAE, you can follow these step-by-step instructions:

Gather Information: Have the necessary details ready, including the start and end date of the working period, the net and basic salary of the worker, and the reason for leaving the job.

Access the MOHRE Website: Visit the Ministry of Human Resources and Emiratisation (MOHRE) website at mohre.gov.ae.

Navigate to the Calculator: Click on the ‘Services’ tab on the menu and then select ‘Domestic Worker Calculator’.

Enter Details: Fill in the required information in the calculator:

Start and end date of the work contract.
Net and basic salary of the domestic worker.
Select the reason for leaving from the options provided:
Contract ended
Worker resigned for no reason
Worker resigned because the employer breached the contract
Worker dismissed for no reason
Worker dismissed for breaching the contract

Additional Details: Enter specific period salary, annual leave salary, weekend allowance, and work injury details if applicable.

Review Calculation: As you input the information, the calculator will display the total amount payable. If there are any unclaimed leaves or unpaid salary, the gratuity will adjust accordingly.

Finalize and Print: Once all details are entered, review the total allowance at the bottom of the calculator. You can then print out the breakdown for reference.

By following these steps and using the MOHRE online calculator, you can accurately determine the end-of-service benefits and gratuity for domestic workers in the UAE.

For Limited Contract:

For limited contract domestic workers, gratuity will be given on the basis of 14 day salary per year

How to calculate gratuity:

BASIC SALARY/30= ONE DAY SALARY

ONE DAY SALARY MULTIPLIED BY 14= YOUR GRATUITY PER YEAR

For example:

Basic salary = 2000 DH

Divide 2000/30= 66 DH per day salary

66 multiplied by 14= 924 DH

924 DH is your annual gratuity.

Multiply this 14 days salary by the number of years you have worked. Add any other unpaid leaves, allowances will be added to your gratuity.

For Unlimited Contract

For employees working under unlimited contract, the gratuity will be calculated as one month salary per year.

Am I Eligible for Gratuity as a Domestic Worker?

According to article 26, to be eligible for gratuity in the UAE, an employee must meet the following conditions:

Continuous Service: The employee must have worked continuously for at least one year with the same employer.

Employment Contract: The employee must have a limited or unlimited labor contract in place.

No Breach of Contract: The employee must not have breached the terms of their contract, and the employer must have fulfilled their legal obligations towards the contract.

No Termination under Article 120: The employee must not have been terminated under Article 120 of the UAE Labor Law. It includes termination without notice due to non-compliance with certain matters.

No Outstanding Debts: The employee must not owe any outstanding amounts to the employer, which can be deducted from the gratuity.

Basic Salary: The gratuity calculation is based on the employee’s basic salary, excluding additional benefits unless specifically mentioned in the contract.

These conditions ensure that employees who have dedicated a significant amount of time to their employers are fairly compensated for their service.

No Gratuity:

According to Article 27 of the UAE Domestic Workers Law:

If the contract is terminated due to the worker’s illegal act or if they breach the contract, the domestic worker will be denied end-of-service compensation.

If the domestic worker terminates the contract without any due cause or valid reason before the contract ends, they will be ineligible for end-of-service gratuity.

How can I claim Gratuity while being outside the UAE

To claim your end-of-service gratuity from outside the UAE, you can follow these steps:

Make a written request to your employer to transfer your gratuity amount to a bank account outside the UAE. Clearly mention the settlement amount and the bank details where the payment should be made.
Ensure you have complied with all necessary documents and formalities as required by your employer.
Close your UAE bank account registered for your salary. If there has been no activity in the account for at least 12 months, it may become dormant.
In some cases, the employer may directly transfer the gratuity to your UAE bank account registered for salary. If you plan to return to the UAE, you can withdraw the amount. Otherwise, send a written request to your UAE bank to transfer the balance to your home country account.
If your employer refuses to settle the gratuity, file a complaint with the Labour Office and then proceed to the Labour Court. Seek legal advice for conflict resolution.

It’s important to have clear communication with your employer, comply with all formalities, and maintain records of important events related to your termination to strengthen your case.

Conclusion

In conclusion, calculating gratuity for domestic workers in the UAE is a crucial aspect of ensuring compliance with labor laws and providing fair compensation to workers. The UAE Domestic Workers Law outlines the specific conditions and calculations for end-of-service gratuity, which is based on the worker’s basic salary and years of continuous service.

Employers can use the MOHRE online calculator to accurately determine the gratuity amount, taking into account factors such as unpaid leave, weekend allowance, and work injury. However, workers who breach their contract or resign without a valid reason before the contract ends forfeit their right to gratuity.

It is essential for employers to understand the conditions and procedures for calculating gratuity to avoid disputes and ensure a smooth termination process. Domestic workers, on the other hand, should be aware of their rights and the procedures for claiming their end-of-service benefits, even if they leave the UAE.

By following the guidelines and using the MOHRE calculator, both employers and workers can ensure a fair and transparent process for calculating gratuity, promoting a positive and respectful work environment in the UAE.

FAQs

How is gratuity calculated for domestic workers in the UAE?

Gratuity for domestic workers is typically calculated based on their basic salary and years of continuous service, using specific formulas outlined in the UAE labor laws.

Can a domestic worker claim gratuity if they resign before completing one year of service?

No, domestic workers must complete at least one year of continuous service to be eligible for gratuity upon termination of their contract.

What happens if a domestic worker breaches their contract?

If a domestic worker breaches their contract, they may forfeit their right to receive end-of-service gratuity as per UAE labor laws.

Can a domestic worker claim gratuity if they are terminated without cause by their employer?

Yes, domestic workers are entitled to gratuity if they are terminated without cause by their employer, as long as they have completed the required period of service.

Is the gratuity amount taxable for domestic workers in the UAE?

No, gratuity payments are not subject to income tax in the UAE, making them a tax-free benefit for domestic workers.

Can a domestic worker claim their gratuity if they have left the UAE?

Yes, domestic workers can claim their gratuity even after leaving the UAE by requesting their employer to transfer the amount to a bank account outside the country.

What should employers do to ensure accurate gratuity calculations for domestic workers?

Employers should use the MOHRE online calculator, provide all necessary information accurately, and comply with UAE labor laws to ensure fair and correct gratuity calculations for domestic workers.

Can a domestic worker claim gratuity if they have outstanding debts to their employer?

No, domestic workers who have outstanding debts to their employer may have their gratuity amount reduced or withheld to settle these debts.

How long does it take to receive gratuity after termination of a domestic worker’s contract?

The time it takes to receive gratuity after termination of a domestic worker’s contract varies depending on the employer and the specific circumstances. However, employers are generally required to settle gratuity within a reasonable timeframe, usually within a few weeks or months.

Are there any specific documents required for claiming gratuity by a domestic worker?

Yes, domestic workers typically need to provide proof of their employment contract, proof of their service period, and any other relevant documents to support their claim for gratuity.