Gratuity Calculator and Rules for JAFZA 2025

Gratuity is an important right of any employee. It’s a financial benefit after years of service at the end of the job, so it is mandatory and important for both employer and employee to have a thorough understanding. Here we provide complete details about gratuity in Jebel Ali Free Zone Authority (JAFZA).

So instead of guessing on calculations, you must have basic knowledge about the rules and on which basis your gratuity is calculated, so you can calculate simply in just a few steps.

JAFZA is the major free zone in the world. It’s the largest international trade hub, located in Dubai, and attracts companies from around the world, and manages a diverse workforce. As it’s a free zone, JAFZA has its own rules of workforce management, although it is closely aligned with UAE Labor Laws.

To become eligible for gratuity in JAFZA, there are a few requirements that you have to fulfil.

Minimum Service Period:

The minimum service period for gratuity entitlement is 1 year of consecutive service. If you do not complete this basic requirement, you are not eligible

Completion of Contract & Notice period:

Limited Contract: When you are serving under a limited contract, you have to complete the contract. Suppose you leave your job without completing a Limited contract, and do not inform in writing and serve the notice period as decided in the contract, you may lose your right for gratuity.
Unlimited Contract: It’s an open-ended contract, and the end date is not decided, so you have to be intimate in writing and serve the notice period.
As per the New Labor Laws, all contracts need to be shifted to limited contracts only. For a detailed understanding you may read New Employment Labor Law UAE 2025.

Avoidance of any Misconduct:

To avail your gratuity amount, avoid being involved in any unlawful activity or any misconduct, your employer has the right to deduct any payable or recover losses from your final settlements.

Calculating gratuity for JAFZA is very simple and is based on,

• Last Basic Salary (Allowances and Perks are excluded)
• Duration of Service (Start date & End Date)

First Five Years: 21 Days of Basic Salary for each year of service.
Above 5 Years: 30 Days of basic salary for each year of service.

As per the rules and formula used by Dubai Trade.

The Formula for JAFZA Gratuity is:

Service Years: 1 to 5 years
Gratuity = (Basic Pay × 21 days × service years) / 30
Service Years: Above 5 Years
Gratuity = (Basic salary × 30 Days × Service Years) / 30

Manual calculations can be tricky, so to avoid any errors, you can calculate your JAFZA gratuity by using the online free tool Gratuity Calculator UAE, which provides you with an accurate estimate in just a few clicks. You can export your calculated results in Excel and take prints as well, all you need to do is provide your information, that is;

• Last Basic Salary
• First Working Day
• Last Working Day
• Separation Type (Method by which you left your Job)

Gratuity Calculation Example:

Employee: Maryam
Basic Salary: AED 5000 per month.
Employment Duration: 6 Years

Gratuity for first 5 Years= 21 (Days) ✕ AED 5000 (Basic Salary) ✕ 5 (Year)r ÷ 30 = AED 17,500
Gratuity for Years above 5 years i.e. for 6th Year= 30 (Days) ✕ AED 5000 (Basic Salary) ✕ 1(Year) ÷ 30 = AED 5,000
So total gratuity will be AED 17,500 (For the first 5 years) + AED 5,000 (Next 1 year) = AED 22,500.
Maryam’s Final Gratuity will be AED 22,500.

In the final settlement, there are other components included, which are:

• Payment of any outstanding salaries: Any unpaid salaries and allowances up till last working day.
• Payment for the non-availed leaves: Annual leaves that is 30 Leaves per year if you have any non-availed balance employer have to pay for those. Calculated based on your basic salary.
• Gratuity: As we calculated above.
• Experience Letter: As a positive gesture employer have to give you a experience letter for your services, which you can use for your next employment.

There are several factor that can be the reason of deductions and may affect your final gratuity payments, understand these to receive maximum gratuity.

• Payable to Employer: If you have any payable to employer and any losses, employer have right to recover from your final settlement.
• Notice Period: If you do not serve appropriate notice period as mentioned in your contract employer have right to deduct mentioned penalty from your gratuity.
• Maximum Capping on Gratuity: Maximum gratuity can not exceed the limit of 2 years of basic salary.

Gratuity for JAFZA Domestic Worker:

The rules of gratuity for domestic workers in JAFZA can be different. The UAE has separate laws for domestic workers. For general understanding, you may read out Gratuity for Domestic workers or consult relevant authorities.

First, if you have any dispute with your employer, discuss it openly and try to resolve it by yourself, but sometimes discrepancies are unavoidable; you may seek legal support in that case, and you can take legal assistance from the labor law experts.

Delayed in Gratuity Payment:

As per law, your employer has to pay your final settlements within 14 days after the last date of your employment. If your employer has not paid you within the specified period and raises any dispute, and you are unable to resolve it by yourself, you can contact JAZFA’s labor affairs section, and also take legal support from a labor law expert.
 

Gratuity is not just a monetary benefit; it’s a token of appreciation to employees for their honest services, and definitely helpful for them financially and as a reward from their employer, which is their legal right.

Understanding of gratuity is important to avoid any disputes, and to avail the maximum of your end-of-service benefits, you must keep all official documents like your salary statements, record of non-availed leaves, contract copy, written notice period if required, and submit all documents timely to your human resources department.