Basic wage
Basic wage is the amount identified as basic pay in the employment contract, excluding allowances and benefits unless the governing rule says otherwise. Traditional federal gratuity is normally based on the last basic wage.
Total wage
Total wage can include the basic wage plus contractual cash allowances. Federal notice compensation generally refers to the last wage, so it should not be assumed to match the gratuity basis.
Unused leave at termination
Federal unused leave is calculated using basic wage. ADGM uses a different daily-wage approach for payment in lieu of vacation, so the selected jurisdiction matters.
Verify the documents
Compare the contract, latest payslip and payroll records. If the payslip labels do not match the contract, ask HR to explain the wage components used in the settlement.
Questions to ask HR or payroll
- What is the contractual basic wage?
- Which allowances are fixed cash allowances?
- Which wage definition applies to this line?
- Did the wage change before the last working day?
- Is HR using the same rate for unrelated components?
Frequently asked questions
Is housing allowance included in federal gratuity?
Traditional federal gratuity generally uses basic wage rather than automatically including housing allowance.
Does leave salary always use total wage?
No. Federal payment for unused leave at termination is based on basic wage; other contexts and jurisdictions can differ.
What if my contract and payslip show different basic wages?
Ask for an explanation and preserve both records. A disputed wage basis may require official review.
Official sources used
Rules can change and facts can be disputed. Review the source that applies to your jurisdiction and current circumstances.