In Qatar, on termination of employment, an employee is liable to be paid end-of-service gratuity and leave salary. Qatarloving.com offers you an insight into the calculation of gratuity payment in Qatar. Just read on...
What is gratuity?
According to gratuity rules in Qatar, It is the sum of money an employer is lawfully required to pay an employee upon the termination of the employment relationship. Gratuity payment in Qatar is subject to the employee satisfying certain conditions that are set out in the Qatari Labour Law. The gratuity scheme was introduced years ago to make sure that when jobs were terminated, employees without pension benefits received a lump sum payment to tide them over the period following termination or for them to put towards their savings.
The gratuity payment in Qatar is based on the employee’s basic salary and length of service. It may even be reduced depending on the circumstances of the termination of employment and where the employee was working. The gratuity calculation does not consider payments that are added to basic salaries like housing and car allowance. Nevertheless, where an employee receives a guaranteed or regular commission payment, this may be included within the calculation of basic salary for the purposes of the End of Service Gratuity (ESG) calculation.
The amount
There are 3 variety of gratuity facilities:
- Below 5 years
- Between 5 to 10 years
- Higher than ten years
Employees who have completed one year of service are eligible to 21 calendar days’ salary for each year of service in the first five years of employment and 30 calendar days’ salary for each year of service worked beyond five years. A proportional basis is applied for ESG payment calculation and the employees receive credit for the entire period of service accordingly. The key factor is that the calculation is applied to the employee’s salary at the time of termination, & this will mostly result in a substantial ESG for long-serving employees. The maximum ESG paid cannot, however, exceed two years’ salary.
Gratuity formula for Qatar
How to calculate your gratuity in Qatar according to your Basic Salary?
If your service period is less than 5 years, then you will get 3 weeks of your salary as a gratuity.
Here is a simple gratuity formula in Qatar:
Basic Salary/30 (one month) X 21 days (three Weeks) x Year
For example: suppose you are working in a company for 2 years and your salary is 2000 Qatari Riyal then.
QR 2000÷30 = QR 66.66 (One day salary)
QR 66.66 x 21 = QR 1400 (21 Days Salary)
QR 1400 x 2 = QR 2800 (Your total 2 Years of Bonus)
Gratuity in Qatar for 5 - 10 years
If your service period is between 5 to 10 years, then you will get 4 weeks of your salary as a gratuity.
This is also the same method as mentioned above, let's check out an example here too.
Assume that your salary is QR 2000 and your total service period is 7 years.
Calculating formula: Basic Salary / 30 (one month) x 28 (4 Weeks) x Years
QR 2000÷300 = QR 66.66 (Your One day salary)
QR 66.66 x 28 Day = 1866.48 (Your 28 days salary)
QR 1866.48 x 7 years = 13065.36 (Your Total 7 years of gratuity)
Gratuity in Qatar after 10 years
If your service period is more than 10 years, then you will get 5 weeks of your salary as a gratuity.
Apply the same formula as above mentioned; all you need to do is multiply by 5 weeks instead of 4 weeks.
Formula: Basic Salary/30 (One month) x 35 (five weeks) x Total Service Years
Let your salary be QR 2000 Riyal, and you have worked in a company for 12 years. How much gratuity will you get?
QR 2000÷30 = QR 66.66 (One months of salary)
QR 66.66 x 35 = QR 2333.1 (Your one years of gratuity)
QR 2333.1 x 12 years = QR 27997.2 (Your total gratuity)
Reduced amount
Reductions may be applied to ESG entitlement when individuals employed in onshore organizations within Qatar or in free zones resign from their roles. This happens especially where an employee on a limited-term contract of fewer than five years’ service resigns prior to the expiry of the fixed term. The employee becomes not entitled to an ESG payment whatsoever.
For an employee on an unlimited term contract, having been employed for more than one year but less than three years, he will receive one-third of the full ESG entitlement. If the period of continuous service is more than three years but less than five years the employee will be entitled to two-thirds of the full ESG. An employee with five years of service, either on a limited or unlimited term contract, stands entitled to full gratuity with no reduction as such pursuant to a resignation.
No ESG
Apart from the other options to the ESG system, employees will not be entitled to an ESG where their employment terminates in the following circumstances:
- The employment relationship ends before the employee accrues 12 months service.
- The employee was dismissed for a violation of Article 88 of the UAE Labour Law or for one of the ten reasons stated in Article 120 of the Labour Law.
- An employee on a limited-term contract with less than five years of continuous service resigns before the end of the defined period.
- The employee resigned without notice (in circumstances other than those set out in Article 121 of the Labour Law) when he/she was employed under an unlimited term contract.
Legal matters
If an employee believes he has not received his full entitlement to an ESG payment, he is required to refer the matter to the Ministry of Labour. However, those employees who do not have the understanding or technical know-how to pursue a claim are at a significant risk
Gratuity Calculation online
Gratuity Calculation is a major cause of worry for every private worker living in Qatar. Due to a lack of awareness of labor laws self-calculation of gratuity calculation according to labor laws in Qatar is difficult for ex-pat workers, and at times, if the worker is not well educated he might get tricked by his employer and end up with less gratuity or no gratuity at all. Not to worry, you can calculate End of Service Gratuity in Qatar Online.
In 2017, the Ministry of Administrative Development, Labour and Social Affairs launched a new electronic service that allows expatriate workers to calculate their end of service gratuity in Qatar. Qatar Ministry of Interior and MOL Online portal which is considered as one of the most effective and reliable online integrated system in the world provides an e-service through which any private sector employee is able to calculate his end of service Gratuity in Qatar and is also able to know is he/she is eligible to get gratuity or not.
The employee will have to fill up a form provided on the website of the ministry with information about the date of starting service, date of ending service, basic salary, number of payable days per year which is not less than three weeks as per the law. The required data should be filled in accordance with the valid job contract signed with the employer and the duration of the service. By introducing this service, the ministry has been able to ensure greater transparency and to make foreign workers aware of their rights.
We hope this insight on how to calculate gratuity in Qatar from qatarloving.com has been helpful to you.