In Qatar, the End of Service Gratuity (ESG) is a mandatory benefit provided to employees upon the termination of their employment contract. The amount of the gratuity is calculated based on the employee’s salary and the duration of their service. In this article, we will provide a step-by-step guide on how to calculate End of Service Gratuity in Qatar 2024.
Understanding the Basics
Before we talk about the calculation process, it is essential to understand the basics of End of Service Gratuity in Qatar. The ESG is a mandatory benefit that is calculated based on the employee’s salary and the duration of their service. The gratuity is calculated at the rate of 21 days’ salary for each year of service, up to a maximum of 42 days’ salary.
Steps to Calculate End of Service Gratuity
To calculate the End of Service Gratuity, you will need to follow these steps:
Step 1: Determine the Employee’s Salary
The first step in calculating the End of Service Gratuity is to determine the employee’s salary. The salary used for the calculation should be the employee’s average salary for the last 12 months of their service.
Step 2: Determine the Duration of Service
The next step is to determine the duration of the employee’s service. This includes the total number of years and months the employee has worked for the employer.
Step 3: Calculate the Gratuity Entitlement
Once you have determined the employee’s salary and the duration of their service, you can calculate their gratuity entitlement. The gratuity entitlement is calculated at the rate of 21 days’ salary for each year of service, up to a maximum of 42 days’ salary.
Step 4: Calculate the Total Gratuity
The final step is to calculate the total gratuity. This is done by multiplying the gratuity entitlement by the number of years and months the employee has worked for the employer.
Example Calculation
Let us use an example to illustrate the calculation process. Suppose an employee has worked for an employer for 5 years and 3 months, and their average salary for the last 12 months is QR 10,000.
Step 1: Determine the Employee’s Salary
The employee’s salary is QR 10,000.
Step 2: Determine the Duration of Service
The employee has worked for 5 years and 3 months, which is equivalent to 6 years.
Step 3: Calculate the Gratuity Entitlement
The gratuity entitlement is calculated as follows:
- 21 days’ salary for each year of service = 21 days x QR 10,000 = QR 210,000
- Total gratuity entitlement = QR 210,000 x 6 years = QR 1,260,000
Step 4: Calculate the Total Gratuity
The total gratuity is QR 1,260,000.
Conclusion
Calculating End of Service Gratuity in Qatar 2024 is a simple process that involves determining the employee’s salary and the duration of their service and then calculating the gratuity entitlement and total gratuity. By following the steps outlined in this blog post, you can ensure that you are in compliance with the laws and regulations of Qatar and provide a fair and accurate calculation of the End of Service Gratuity to your employees.
People May Ask
How to calculate gratuity in Qatar?
According to the Labour Law in Qatar, gratuity is calculated based on the employee’s basic salary and the number of years of service. The formula is as follows:
- For employees with less than 5 years of service: 3 weeks of basic salary
- For employees with 5 years or more of service: 21 days of basic salary for each year of service
What is the formula for calculating gratuity?
The formula is:
Basic Salary / 30 (one month) x 21 days (three weeks) x Number of Years of Service
For example, if an employee has a basic salary of QAR 2,000 and has worked for 2 years, the gratuity would be:
2,000 QAR / 30 (one month) x 21 days (three weeks) x 2 years = 1,400 QAR
How to calculate end of service benefits?
End of service benefits in Qatar include gratuity and leave salary. To calculate the end of service benefits, you need to consider the following:
- Gratuity: calculated based on the employee’s basic salary and the number of years of service (as mentioned above)
- Leave salary: calculated based on the employee’s basic salary and the number of days of leave accrued
What is gratuity benefits in Qatar?
Gratuity benefits in Qatar are a financial safety net provided to employees upon the termination of their employment contract. The benefits are calculated based on the employee’s basic salary and the number of years of service. The gratuity benefit serves as a financial support to help employees cover their expenses until they find a new job.
In Qatar, the Labour Law requires employers to provide a minimum of three weeks of basic salary as gratuity for employees with less than 5 years of service and 21 days of basic salary for each year of service for employees with 5 years or more of service.
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