How does SupaJack Construct calculate end-of-service gratuity?
On the last basic salary, as Article 51 sets: 21 days a year for the first five years and 30 for each year after, pro rata for part years once a year is complete, capped at 24 months of basic salary. The final settlement adds leave, notice and unpaid salary and posts it as one journal entry.
On this page
Unpaid days
Article 51 excludes unpaid days of absence from service. Before calculating gratuity, the system subtracts the employee's approved leave of any type marked unpaid from the service period, counting a half day as 0.5. It does this in the final settlement, the monthly end-of-service provision and the gratuity simulator. The free gratuity calculator on this site has a field for unpaid days.
Monthly accrual
Gratuity is also accrued monthly and reconciled, so the liability in the balance sheet tracks what would be due if every employee left today.
Same formula as the calculator
The gratuity calculator on this site uses the same formula as the system. A test runs both on the same inputs and checks that the results match to the fils.
Related tools and guides
See payroll and WPS, time and attendance, interim payments, finance and VAT, approvals, the construction ERP overview, the buyer's guide and the answer on scheduling, BIM and safety.
Worked example
An electrician with a basic salary of AED 4,500 leaves after 6 years and 3 months. The system pays 105 days for the first five years and 37.5 days for the remaining 1.25 years, 142.5 days at AED 150 a day, AED 21,375, well under the AED 108,000 cap.
Questions people ask
Is gratuity on basic or total salary?
Basic, as Article 51 sets.
Is the two-year cap applied?
Yes, 24 months of basic salary.
Are unpaid days removed automatically?
Yes, approved leave of an unpaid type is removed from service, with half days as 0.5.