Need HR support for your business?
Outsourced HR from AED 4,500/month — payroll, compliance, Emiratisation and more.
EOSB Calculations Made Simple: Avoid These Common Errors
EOSB Calculations Made Simple: Avoid These Common Errors
End-of-service gratuity calculations look simple on paper — years of service, basic salary, a formula. In practice, they're one of the most commonly miscalculated figures in UAE payroll, and the errors are rarely caught until an employee disputes their final settlement.
Basic salary isn't the same as total salary
EOSB is calculated on basic salary, not gross pay including allowances — a mistake that either overpays or underpays every departing employee, depending on which direction the error runs.
Contract type and length of service change the calculation
Whether an employee resigned or was terminated, and the length of service at each threshold, changes the entitlement percentage. A one-size-fits-all formula applied across every exit is a guaranteed source of errors.
Unused leave and other entitlements are separate line items
EOSB doesn't automatically include unused annual leave, unpaid overtime, or other outstanding dues — each needs to be calculated and settled independently.
Errors don't stay isolated
A formula mistake in your payroll system doesn't affect one employee — it repeats for every departure until someone catches it, at which point you may be correcting months or years of settlements at once.
Get a free EOSB audit on three employee files and find out whether your calculations would hold up if challenged — request yours with EvolvedHR.
Need personalised HR guidance?
Book a consultation with Nia Chase — expert UAE HR advice for your situation.
Comments (0)