Question: Can you please explain to me how gratuity is calculated? I have just been given a raise, but I have observed that my basic salary has been kept the same. Will this affect my gratuity?
Answer: It is assumed that your employment is subject to the provisions of the UAE's Federal Law No 8 of 1980 on the Regulation of Employment Relations as amended from time to time (the Employment Law), along with the Ministerial Resolutions and Decrees issued in pursuance thereof.
Following your query, Article 134 of the Employment Law may be referred. The end-of-service gratuity of an employee is to be calculated based on his/her last drawn salary subject to the condition that it shall not include anything given to the employee in kind, in addition to allowances for housing, transport, travel, overtime, representation, children's education, recreation and social services. The said Article 134 reads as follows:
"Article (134)
Come February 2022, the Employment Law shall be abrogated and replaced entirely by the new Federal Decree-Law No (47) of 2021 On the Standard General Rules of Work in the United Arab Emirates (the New Employment Law).
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