How Is Notice Period Pay Calculated in the UAE?
- Each unserved notice day is paid at gross salary ÷ 30 — note: gross, not basic.
- If the employer skips your notice, they pay you; if you skip it, it is deducted from your settlement.
- Notice pay is part of the final settlement due within 14 days of your last working day.
The two directions
- Employer ends contract without notice → employer pays you: gross ÷ 30 × unserved days
- You resign without serving notice → employer deducts: gross ÷ 30 × unserved days from your final settlement
Key rules
- Notice length: 30–90 days as per your contract (30 days minimum)
- Salary basis: total/gross salary — unlike gratuity and leave, which use basic
- During probation: different rules apply — typically 14 days' notice, and the employer can terminate with 14 days' notice for a new employer transfer
- Notice pay is part of your final settlement, due within 14 days of your last working day
Who pays whom: scenario table
Four common situations, assuming a gross salary of AED 12,000 and a 30-day notice period (a daily rate of 400):
| Scenario | Who pays whom | Amount |
|---|---|---|
| Employer terminates with immediate effect | Employer pays you | 30 × 400 = AED 12,000 |
| You resign and leave immediately | Deducted from your settlement | 30 × 400 = AED 12,000 |
| Either side serves the full 30 days | Nobody — the notice is worked | AED 0 |
| Mutually agreed waiver, confirmed in writing | Nobody — if it's genuinely mutual | AED 0 |
The last row is where disputes breed: a "waiver" agreed verbally often turns into a deduction at settlement time. If notice is waived, get it in writing — one line in an email is enough to stop the argument before it starts.
One more thing worth knowing: your contract's notice length is negotiable before you sign. The law allows 30–90 days, and most private-sector contracts default to 30 or 60. A 90-day notice can trap you in a slow exit when a new employer wants you in four weeks — and buying yourself out costs 90 days of gross salary. If you're signing a new contract, push for the shortest notice both sides will accept; the flexibility is worth far more than it looks on paper.
Worked example: partial notice served
Most exits aren't all-or-nothing. Suppose your gross salary is AED 18,000, your notice period is 30 days, and you serve 12 days before your last working day:
Two things people get wrong here. First, the deduction uses gross salary — unlike gratuity and leave encashment, which use basic. Second, under the 2022 rules your gratuity is not reduced for resigning, so the notice deduction and the gratuity are two separate, independent lines in your settlement — one doesn't shrink the other.
Notice pay in your final settlement: a timeline
- Day 0 — notice in writing. Resign by email or get the termination letter; verbal notice is worthless in a dispute.
- Confirm the last working day. Check the exact end date against your contract's notice length (30–90 days) and get HR's confirmation in writing.
- Check the settlement math. Notice pay or deduction = unserved days × (gross ÷ 30), sitting alongside gratuity and leave encashment in your final settlement.
- Mind the 14-day deadline. The full settlement — notice pay included — is due within 14 days of your last working day. Chase it in writing from day 15.