UAE End of Service Benefits: The Complete Guide (2026)
When your job in the UAE ends — whether you resign or are terminated — your employer owes you a final settlement: a bundle of payments defined by Federal Decree-Law No. 33 of 2021 (the UAE Labour Law). Most people only think of gratuity, but the settlement has up to five components, each calculated on a different salary basis. This guide breaks down every one, with worked examples.
1. End-of-service gratuity (the big one)
Gratuity is the largest component for most employees. Under Article 51, a full-time private-sector employee with at least one year of continuous service receives:
- 21 days of basic salary for each of the first five years
- 30 days of basic salary for each year beyond five
- Daily rate = basic salary ÷ 30; part years paid pro-rata
- Total capped at two years' basic salary
Daily = 8,000 ÷ 30 = AED 266.67
First 5 years: 5 × 21 × 266.67 = AED 28,000
Years 6–7: 2 × 30 × 266.67 = AED 16,000
Total gratuity: AED 44,000
Critical: gratuity uses basic salary only — never allowances. And since February 2022, resignation does not reduce it.
2. Unused annual leave encashment
Any annual leave you earned but didn't take is paid out on basic salary ÷ 30 per day (Cabinet Resolution No. 1 of 2022, Article 19).
3. Notice pay (pay in lieu of notice)
If your employer ends the contract without letting you work the notice period, they owe you the total (gross) salary for the unserved days. Conversely, if you leave without serving notice, the employer can deduct the same from your settlement.
4. Unpaid salary
Wages for days worked but not yet paid, on total salary ÷ 30.
5. Deductions
The employer may deduct genuine advances or loans you owe. Anything else — "training costs", arbitrary penalties — should be questioned.
Summary table: which salary basis?
| Component | Salary basis | Legal reference |
|---|---|---|
| Gratuity | Basic ÷ 30 | Article 51 |
| Unused leave | Basic ÷ 30 | Cabinet Res. 1/2022, Art. 19 |
| Notice pay | Total ÷ 30 | Article 43 |
| Unpaid salary | Total ÷ 30 | Article 22 |
The 14-day rule
Your employer must pay everything within 14 days of your last working day (Article 53). If payment is late or short, complain in writing first, then file with MOHRE — you have two years to claim.
Who this doesn't cover
- DIFC — gratuity replaced by the DEWS savings scheme
- ADGM — own Employment Regulations
- Domestic workers — Federal Law No. 10 of 2017
- UAE nationals — pension system (GPSSA)
The 14-day action plan: what to do when you resign
Your end-of-service money does not arrive automatically — you have to ask for it, check it, and chase it. Work through this checklist from the day you hand in your resignation:
- Get the settlement breakdown in writing. Ask HR for an itemised statement covering gratuity, unused leave encashment, notice pay and any unpaid salary — ideally before your last working day. A written figure is something you can dispute; a verbal promise is not.
- Verify every component against the formula. Gratuity is 21 days of basic salary per year for the first five years and 30 days per year after that, with a daily rate of basic ÷ 30, pro-rated for part-years and capped at two years' basic salary. Unused leave is encashed at basic ÷ 30 per unused day. Run your own numbers and compare each line against the HR statement before you sign anything.
- Confirm payment within 14 days of your contract ending. Article 53 of the Labour Law requires the employer to settle everything owed within 14 days of termination. Mark the date on your calendar the day you leave.
- If payment is late or short, complain in writing first. Send a dated email restating the correct amounts and giving a short deadline to pay. Keep every response — a paper trail is what MOHRE will look at if the dispute escalates.
- Escalate to MOHRE within the 2-year claim window. If the employer still does not pay, file a labour complaint with the Ministry of Human Resources and Emiratisation. You have two years from the date the amount became due — but file as soon as the written complaint fails, rather than waiting out the deadline.
Frequently asked questions
Does resigning reduce my gratuity?
No. Since the new Labour Law took effect in February 2022, there is no reduction in gratuity for resigning — the same 21/30-day formula applies whether you resign or are terminated, as long as you have completed at least one year of service. Read the full explanation here.
Do I get gratuity if I worked less than a year?
No. Article 51 of Federal Decree-Law No. 33 of 2021 requires a minimum of one year of continuous service before any gratuity is payable. If you leave before completing a year, you are still owed salary, leave encashment and notice pay — but not gratuity.
Is gratuity calculated on basic or gross salary?
Basic salary only. Allowances such as housing, transport and commission are excluded from the gratuity base — which is why a contract with a low basic salary produces a much smaller payout than the headline figure suggests. See how basic vs gross changes your figure.
What if my basic salary changed over the years?
Gratuity is calculated on the last basic wage you received, not an average of your salary history. A recent pay rise increases gratuity across all years of service, while a cut reduces it — so negotiate your salary structure before you resign, not after.
Can my employer deduct "training costs" from my settlement?
Only genuine, documented deductions are allowed — such as a real salary advance or an outstanding loan you actually signed for. Vague "training cost" deductions are not a free pass: ask for the contract clause or signed agreement that authorises the deduction, and challenge anything that is not backed by one.
What do I do if my settlement is late or short?
Follow the action plan above: get the breakdown in writing, verify it yourself with the calculator, send a dated written complaint with a payment deadline, and if that fails, file a complaint with MOHRE within the two-year claim window. Keep every payslip, contract and message as evidence.
Calculate your own settlement
Enter your salary and dates — get every component itemised.
Open the calculator