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Basic Salary Formula:
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Basic salary is the core component of an employee's compensation package in the UAE, excluding all allowances and benefits. It forms the foundation for calculating end-of-service benefits, overtime, and other statutory entitlements under UAE labor law.
The calculator uses the basic salary formula:
Where:
Explanation: The basic salary is calculated by subtracting all allowances and additional benefits from the total gross salary.
Details: Accurate basic salary calculation is crucial for determining end-of-service gratuity, overtime payments, leave salary, and other statutory benefits as per UAE Labor Law.
Tips: Enter total salary in AED (including all components), enter allowances in AED (housing, transportation, etc.). All values must be valid and total salary should be greater than or equal to allowances.
Q1: What is included in allowances in UAE?
A: Allowances typically include housing allowance, transportation allowance, furniture allowance, and other benefits specified in the employment contract.
Q2: Why is basic salary important in UAE?
A: Basic salary determines end-of-service benefits, overtime calculations, and is used as the basis for various statutory calculations under UAE labor law.
Q3: Is there a minimum basic salary requirement in UAE?
A: There is no fixed minimum basic salary, but it must be sufficient to cover living expenses and should be clearly stated in the employment contract.
Q4: How is end-of-service benefit calculated?
A: End-of-service benefit is calculated based on basic salary: 21 days for first 5 years, 30 days for subsequent years of service.
Q5: Can basic salary be less than 60% of total salary?
A: While there's no specific percentage requirement, it's recommended that basic salary constitutes a significant portion of total compensation for proper benefit calculations.