1. What is End Of Contract Gratuity?

End Of Contract Gratuity is a lump sum payment made to an employee at the end of their employment contract as recognition for their service. It's typically calculated based on the employee's salary and years of service.

2. How Does the Calculator Work?

The calculator uses the gratuity formula:

Where:

• \( Salary \) — Monthly salary in Saudi Riyals (SAR)
• \( Service Years \) — Total years of service

Explanation: For the first 5 years of service, the gratuity is calculated as half of the monthly salary multiplied by the number of years. For service beyond 5 years, the full monthly salary is multiplied by the additional years.

3. Importance of Gratuity Calculation

Details: Accurate gratuity calculation ensures employees receive fair compensation for their service and helps employers budget for end-of-service benefits.

4. Using the Calculator

Tips: Enter monthly salary in SAR and total years of service. All values must be valid (salary > 0, years > 0).

5. Frequently Asked Questions (FAQ)

Q1: Is gratuity mandatory for all employees?
A: Gratuity requirements vary by country and employment contract. In many Middle Eastern countries, it's required by labor law.

Q2: Are there different calculation methods?
A: Yes, some countries/companies use different formulas, such as 21 days' pay per year of service.

Q3: Is gratuity taxable?
A: Tax treatment varies by jurisdiction. In some countries, gratuity is tax-exempt up to certain limits.

Q4: What if service is less than 1 year?
A: Many jurisdictions require proportional gratuity for partial years of service.

Q5: Does this apply to contract workers?
A: Typically yes, as long as they are formal employees under a contract.