Gratuity is basically a benefit or a form of tip given by an employer to his employees who are giving their services for the same company for a continuous period. The rules and eligibility of gratuity vary from place to place.
Let’s understand how the gratuity amount and eligibility in India differs from that of UAE:
Differences in gratuity may occur on the basis of years of service, the basic salary of the employee, Act passed on behalf of gratuity, etc.
Different terms are also found for different gratuity schemes.
Now let’s look forward to understanding this difference deeply and properly:
|Gratuity in India||Gratuity in UAE|
|Gratuity: Here, gratuity is the sum of the amount paid by an employer to his employee who worked with him for a continuous period of minimum 5 years.||Gratuity: Whereas in UAE too gratuity is the sum of the amount paid by an employer to an employee who works with his company for continuous 1 or more years.|
|Process: This can be given by an employer or even the employee can contribute to his own gratuity.||Process: Here only the employer is responsible for gratuity, and if the employer owes some amount to the employee then he may also deduct that amount from his gratuity amount.|
|Eligibility: The employee who works for a continuous period of 5 or more years with a single employer or in his any establishment then he is entitled with gratuity.||Eligibility: The employee who is working with a single employer for even 1 or more years then he is entitled to gratuity.|
|Calculation: Gratuity in India is calculated by the formula -> N * B * 15 / 26
Where N is the number of years the employee is working in that same company, B is the latest basic salary drawn by the employee.
|Calculation: In UAE the calculation of the gratuity is done by taking the years of service into consideration.
For the service of 1 to 5 years; the gratuity is calculated as the 21 days’ basic salary and after completion of 5 years the gratuity the sum amount of 30 days’ basic salary.
|Tax exemption: Gratuity offered to government employees is exempted from income tax.
All individuals coming under Act of Gratuity Payment are exempted from taxes.
|Tax exemption: All gratuity amounts are exempted from tax. No tax is imposed on this amount. This is a form of tip or gift which can’t be taxed.|
|For calculating Gratuity, we can use the preferred formula. It will be the same in every situation.||Gratuity calculations will differ from person to person based on his or situation. For example, if a person has been let go or he has willing left will change the gratuity amount.|
Make your gratuity in UAE calculation easy, accurate and quick by using the UAE gratuity calculator. With the UAE gratuity calculator, you can now do the gratuity calculations instantly.
NOTE: Gratuity amount is not offered to any of the employees who are terminated or fired due to any misbehavior or due to any serious case.