The DIFC (Dubai International Financial Centre) follows distinct rules for gratuity payments that differ from those of other regions in the UAE, and no specific DIFC gratuity calculator is available.
While general gratuity calculators may help with some calculations, they do not fully reflect the specific provisions under DIFC law.
Let’s look at the essential aspects of gratuity calculations in 2025 within this special economic zone.
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Table of Contents
DIFC Gratuity Calculator and Considerations
The Dubai International Financial Centre (DIFC) does not offer a specific gratuity calculator for end-of-service benefits.
However, the general UAE gratuity calculator follows the standard UAE labor law formulas, similar to those used for calculating past service gratuity under DIFC regulations.
Although these general calculators follow a similar formula for gratuity based on basic salary and length of service, they do not account for the DIFC’s unique provisions, particularly the DEWS.
Therefore, it does not reflect the specific requirements of DIFC law and can’t be used as a DIFC gratuity calculator.
Gratuity Calculation for Non-Exempt Employees
For non-exempt employees under DIFC law, gratuity is calculated based on the basic salary and length of service. The general rules are as follows:
Employees with up to 5 years of service will receive a gratuity of 5.83% of their basic salary for each year worked.
For employees over 5 years of service, the gratuity increases to 8.33% of the basic salary for each additional year.
Example of Gratuity Calculation
An accurate DIFC gratuity calculator should use the method demonstrated below:
Let’s break down how to calculate the minimum employer contribution under DEWS with a couple of examples.
Scenario 1: Employee with less than 5 years of service
Let’s say an employee has been with the company for 3 years and their basic monthly salary is AED 10,000.
Minimum contribution rate: 5.83%
Basic monthly salary: AED 10,000
To calculate the minimum monthly contribution, we would do the following:
- Minimum Monthly Contribution = (Minimum contribution rate / 100) * Basic monthly salary
- Minimum Monthly Contribution = (5.83 / 100) * 10,000
- Minimum Monthly Contribution = 0.0583 * 10,000
- Minimum Monthly Contribution = AED 583
So, in this case, the employer would need to contribute a minimum of AED 583 per month to the employee’s DEWS account.
Scenario 2: Employee with 5 years or more of service
Now, let’s consider an employee who has been with the company for 7 years and their basic monthly salary is AED 15,000.
Minimum contribution rate: 8.33%
Basic monthly salary: AED 15,000
To calculate the minimum monthly contribution:
- Minimum Monthly Contribution = (Minimum contribution rate / 100) * Basic monthly salary
- Minimum Monthly Contribution = (8.33 / 100) * 15,000
- Minimum Monthly Contribution = 0.0833 * 15,000
- Minimum Monthly Contribution = AED 1,249.50
In this scenario, the employer’s minimum monthly contribution to the employee’s DEWS account would be AED 1,249.50.
Gratuity Calculation for Past Services
Employees who accrued gratuity before introducing the DEWS (Dubai Employee Welfare Scheme) on February 1, 2020, may transfer the gratuity amount for past service into the DEWS plan.
The calculation for past services under DIFC follows the same formula used in the standard UAE labor law. It is as follows:
For the first five years of service, employees receive 21 days of basic salary for each year worked. After five years of service, they receive 30 days of basic salary for each additional year.
The total gratuity for past services cannot exceed twice the annual wage. The basic salary must be at least 50% of the annual wage, and the daily rate is based on a 365-day year.
Example Past Service Gratuity Calculations
The UAE and DIFC gratuity calculator electronic forms utilize the method detailed below, which is suitable for calculating UAE labor law gratuity, as well as past service gratuity in the DIFC.
Scenario 1: Service more than 1 year but less than 5 years
Consider an employee who worked for 3 years and 6 months. Their last basic monthly salary was AED 9,000.
Service Duration: 3.5 years (more than 1 year but less than 5 years)
Last Basic Monthly Salary: AED 9,000
According to the rules: “If a worker has served for more than 1 year but less than 5 years, he is entitled to full gratuity pay based on 21 days’ salary for each year of work.”
First, we need to calculate the daily salary:
- Daily Salary = Basic Monthly Salary / 30 days
- Daily Salary = AED 9,000 / 30
- Daily Salary = AED 300
Next, we calculate the gratuity for the full years of service:
- Gratuity for full years = Number of full years of service * 21 days * Daily Salary
- Gratuity for full years = 3 years * 21 days/year * AED 300/day
- Gratuity for full years = 63 * AED 300
- Gratuity for full years = AED 18,900
Now, for the partial year (6 months), the calculation is proportional:
- Gratuity for partial year = (Number of months of partial service / 12 months) * 21 days * Daily Salary
- Gratuity for partial year = (6 / 12) * 21 days * AED 300/day
- Gratuity for partial year = 0.5 * 21 * AED 300
- Gratuity for partial year = 10.5 * AED 300
- Gratuity for partial year = AED 3,150
Finally, we add the gratuity for the full years and the partial year:
- Total Gratuity = Gratuity for full years + Gratuity for partial year
- Total Gratuity = AED 18,900 + AED 3,150
- Total Gratuity = AED 22,050
We should also check if this exceeds the two years’ salary limit:
- Two Years’ Salary = 2 * Basic Monthly Salary * 12
- Two Years’ Salary = 2 * AED 9,000 * 12
- Two Years’ Salary = AED 216,000
In this case, AED 22,050 is well below AED 216,000, so the total gratuity is AED 22,050.
Scenario 2: Service for more than 5 years
Let’s consider an employee who worked for 7 years. Their last basic monthly salary was AED 15,000.
Service Duration: 7 years (more than 5 years)
Last Basic Monthly Salary: AED 15,000
According to the rules: “If a worker has served more than 5 years, he is entitled to full gratuity of 30 days’ salary for each year of work following the first five years.” This means:
For the first 5 years of service: 21 days’ salary per year.
For the years after the first 5 years (in this case, 7 – 5 = 2 years): 30 days’ salary per year.
First, we calculate the daily salary:
- Daily Salary = Basic Monthly Salary / 30 days
- Daily Salary = AED 15,000 / 30
- Daily Salary = AED 500
Now, we calculate the gratuity for the first 5 years:
- Gratuity for first 5 years = 5 years * 21 days/year * AED 500/day
- Gratuity for first 5 years = 105 * AED 500
- Gratuity for first 5 years = AED 52,500
Next, we calculate the gratuity for the years after the first 5 years:
- Gratuity for subsequent years = (Total years of service – 5) * 30 days/year * Daily Salary
- Gratuity for subsequent years = (7 – 5) * 30 days/year * AED 500/day
- Gratuity for subsequent years = 2 * 30 * AED 500
- Gratuity for subsequent years = 60 * AED 500
- Gratuity for subsequent years = AED 30,000
Finally, we add the gratuity for both periods:
- Total Gratuity = Gratuity for first 5 years + Gratuity for subsequent years
- Total Gratuity = AED 52,500 + AED 30,000
- Total Gratuity = AED 82,500
Let’s check the two years’ salary limit:
- Two Years’ Salary = 2 * Basic Monthly Salary * 12
- Two Years’ Salary = 2 * AED 15,000 * 12
- Two Years’ Salary = AED 360,000
In this case, AED 82,500 is less than AED 360,000, so the total gratuity is AED 82,500.
Gratuity Calculation for Exempted Employees
Gratuity calculations differ for employees who are UAE or GCC nationals and enrolled in the GPSSA (General Pension and Social Security Authority).
These employees may receive a top-up payment if their employer’s GPSSA contributions exceed the statutory minimum.
While general calculators follow the standard UAE labor law gratuity formula, they do not include the DEWS framework or the specific calculations and contributions that apply under DIFC law.
Consulting with a legal expert specializing in DIFC regulations is advisable for precise calculations.
Learn more about the UAE’s free zones gratuity calculation.
Legal Services Related to DIFC Gratuity Calculation
DIFC gratuity calculations can be complex, especially for employers and employees who need precise advice.
Our labor lawyer in Dubai specializes in legal services related to DIFC gratuity and end-of-service benefits.
- We ensure that all relevant factors, including the DEWS plan and specific gratuity provisions, are considered.
- We advise employees to maximize their gratuity entitlements and ensure they receive the correct benefits according to DIFC regulations.
- We guide employers in fulfilling their legal obligations regarding employee gratuity, including any necessary DEWS contributions and past service gratuity transfers.
If you need professional advice or assistance calculating DIFC gratuity, our expert legal team is here to help.
Reach out to ensure your gratuity calculations are accurate and compliant with the latest DIFC regulations.
FAQs about DIFC Gratuity Calculations
Conclusion.
Understanding the intricacies of the DIFC gratuity calculator is crucial for both employers and employees.
While general gratuity calculators follow the standard UAE labor law formula, they do not capture all the specific provisions under DIFC law, particularly the DEWS framework.
For precise, accurate calculations or legal assistance related to gratuity, it’s always best to consult a qualified legal professional.
Contact our labor law firm in UAE for expert help. Click the Whatsapp icon below.
A legal consultant specializing in UAE labor law. He regularly publishes articles on the website and writes on various areas of UAE law, with a specific focus on labor law.
