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Short answer: In the UAE’s mainland private sector, a foreign worker who completes at least one year of continuous service is entitled to end-of-service gratuity — 21 days of basic wage for each of the first five years and 30 days for each year after, capped at two years of wage — and the employer must pay wages and all other entitlements within 14 days of the contract ending, under Article 53 of Federal Decree-Law No. 33 of 2021. Alongside gratuity, a final settlement can include unpaid salary, payment for unused annual leave, and notice-period amounts. Since 2023, employers can instead enrol staff in the voluntary Savings Scheme, contributing 5.83 percent of monthly basic salary for under five years of service and 8.33 percent beyond it. A worked gratuity figure for a basic salary of AED 10,000 (≈ ₹2,56,300) a month is shown further down using the live converter.
Who is eligible for gratuity
The gratuity rules summarised on the UAE Government portal (u.ae), under Article 51 of the UAE Labour Law, apply to foreign workers in the private sector on full-time contracts. The conditions stated there are:
- At least 1 year of continuous service with the same employer. A worker who has served less than 1 year is not entitled to gratuity pay.
- Gratuity for fractions of a year, in proportion to time served, once the 1-year threshold is completed.
- Days of absence from work without pay are not counted in the service period.
- Calculation is on the last basic wage. Allowances — housing, transport, utilities, furniture and similar — are not included.
- The total gratuity is capped at the wage of 2 years.
UAE nationals in the private sector are covered by the pensions and social security legislation instead of Article 51 gratuity, as u.ae states. Part-time and other work patterns have their own calculation basis under Article 30 of Cabinet Resolution No. 1 of 2022. The step-by-step maths, with examples, is in the guide to UAE gratuity calculation, and the gratuity calculator applies the same formula to individual figures.
When it must be paid: the 14-day rule
Article 53 sets the deadline. In the words of the official summary on u.ae, employers must pay all outstanding wages, other entitlements and gratuity within 14 days of the termination of the contract. The same 14-day deadline is recorded in legal commentary on Article 53 in Gulf News and in the EGSH legal guide, and it applies whether the contract ended by resignation, expiry or termination by the employer. Under the Savings Scheme, the equivalent rule is that the employee is entitled to the employer’s contributions and the returns on them within 14 days after the termination of employment, as u.ae states.
A worked example
For a worker on a basic salary of AED 10,000 a month who completes 7 years of service, the Article 51 formula gives 21 days for each of the first 5 years (105 days) plus 30 days for each of the 2 further years (60 days) — 165 days of basic wage. At a daily basic rate of basic salary multiplied by 12 and divided by 365, that is approximately AED 54,200 in total, payable within the 14-day window together with the other settlement items below. The rupee equivalent of the monthly basic used here is AED 10,000 (≈ ₹2,56,300); gratuity itself is calculated and paid in dirhams.
What else is settled at end of service
Unpaid salary
Wages due up to the last working day form part of the same final settlement and the same Article 53 deadline. u.ae’s summary covers this in the single phrase “all outstanding wages, other entitlements and gratuity”.
Unused annual leave
Accrued but unused annual leave is paid as a cash allowance calculated on the basic wage. This is stated in Article 29(9) of the Labour Law and confirmed in legal guidance: EGSH records that unused leave is paid on the basic wage when service ends, including where service is under one year and no gratuity is due, and Gulf News records the same basic-wage basis. Leave pay is a separate item from gratuity and is not reduced by the 1-year gratuity threshold.
Notice period, at headline level
Under Article 43, the notice period is the period agreed in the employment contract, within the statutory framework. The party that does not serve the agreed notice compensates the other, and entitlements continue through a notice period during which the employee remains employed — including where the employer directs the employee not to attend work. The 14-day payment clock in Article 53 runs from the end of the contract, after notice has run, not from the day notice is given.
Repatriation ticket
A return air ticket is not a universal, standalone item in the Article 51 gratuity list. It applies where the law or the contract provides for it — classically where a worker was recruited from abroad and the employment ends in the circumstances the law and contract describe, including termination by the employer. The accurate statement is the conditional one: whether a ticket forms part of a particular settlement depends on the contract terms and the circumstances in which employment ended, and it should be read from those documents rather than assumed.
Deductions
u.ae states that employers may deduct amounts owed by the worker from the gratuity. That is the only deduction point recorded in the official summary.
Termination vs resignation under the current law
Under Federal Decree-Law No. 33 of 2021, the reason employment ends does not scale the gratuity. A worker who resigns after completing the 1-year threshold receives gratuity on the same 21-day and 30-day formula as a worker whose contract is terminated or expires; the current law contains no resignation reduction of the kind that existed under the previous labour law. Legal explainers of the 2021 law state this directly: resigning does not reduce the amount. Below 1 year of service, no gratuity is payable on either route, while unpaid wages and unused-leave pay remain due within 14 days.
The voluntary Savings Scheme alternative
Cabinet Resolution No. 96 of 2023 created the voluntary alternative end-of-service benefits system, known as the Savings Scheme, administered under the Ministry of Human Resources and Emiratisation (MoHRE) with the Securities and Commodities Authority (SCA). u.ae describes it as an optional alternative to the traditional gratuity system: instead of a lump sum calculated at exit, the employer contributes monthly to an approved investment fund in the employee’s name.
- Employer contribution — the corrected percentages: 5.83 percent of monthly basic salary where the employee has not completed 5 years of service, and 8.33 percent where the employee has served more than 5 years. These are the monthly equivalents of the gratuity formula itself: 21 days a year is 21/360 of annual basic pay, which is 5.83 percent a month; 30 days a year is 30/360, which is 8.33 percent a month.
- Timing: contributions must be transferred to the fund within 15 days of the beginning of each calendar month.
- Employee top-ups: enrolled employees may add voluntary contributions by deduction from wages or by direct lump-sum transfer, capped at 25 percent of total wage (monthly, or annually for a lump sum).
- Choices: investment options include a capital-guarantee portfolio, risk-based portfolios, and Sharia-compliant funds, through SCA-approved providers.
- What happens to earlier gratuity: on enrolment the employer stops applying the traditional system for enrolled employees and must calculate and settle gratuity accrued before enrolment in accordance with the law. Enrolment can cover all employees, specific groups, or selected categories, and the scheme applies across the private sector and free zones.
- At exit: the employee receives the employer’s contributions plus investment returns within 14 days after termination, and may leave funds invested instead of withdrawing them.
DIFC and ADGM: separate systems
Two financial free zones run their own employment regimes and are signposted here only so they are not confused with the federal system. In the Dubai International Financial Centre (DIFC), the DIFC Employee Workplace Savings scheme (DEWS) replaced end-of-service gratuity from 1 February 2020; DIFC employers contribute monthly at the same 5.83 percent and 8.33 percent of basic salary rates, into a workplace savings plan rather than paying a lump-sum gratuity. The Abu Dhabi Global Market (ADGM) operates under its own employment regulations, with its own end-of-service provisions. Workers in either zone take their entitlements from that zone’s rules, not from Article 51. How any of these figures compare with pay generally is set out in the guide to the average salary in Dubai.
Frequently asked questions
Who gets end-of-service gratuity in the UAE?
A foreign worker in the private sector who completes at least 1 year of continuous service, per Article 51 as summarised on u.ae. UAE nationals are covered by pension legislation instead.
When must end-of-service benefits be paid?
Within 14 days of the contract ending. Article 53 covers wages, gratuity and other entitlements together; Savings Scheme balances are also payable within 14 days after termination.
Does resigning reduce gratuity?
No. Under Federal Decree-Law No. 33 of 2021 the same 21-day and 30-day formula applies on resignation, termination or expiry, once 1 year of service is completed.
What are the Savings Scheme percentages?
The employer contributes 5.83 percent of monthly basic salary for under 5 years of service and 8.33 percent beyond 5 years — equal to 21/360 and 30/360 of annual basic pay. Employees may add voluntary contributions up to 25 percent of total wage.
Sources and method
Primary source: UAE Government portal (u.ae), End of service benefits for workers in the private sector, checked live on 8 November 2026 — eligibility, formula, 14-day payment, deductions, Savings Scheme contributions, top-up cap, 15-day transfer rule and 14-day scheme payout are all stated there under Article 51 of the UAE Labour Law, Cabinet Resolution No. 96 of 2023 and Ministerial Resolution No. 668 of 2023. Cross-checks: DXBStart, UAE end-of-service gratuity explained (21/30 formula, Article 53, resignation position, DIFC and ADGM); EGSH, End of Service: Resigning Before 1 Year (1-year threshold, leave pay on basic wage, Article 53); Gulf News legal Q&A (Article 43 notice, Article 29(9) leave pay, Article 53 deadline); Farahat & Co, Alternative EOSB Scheme UAE guide (scheme structure, 5.83 / 8.33 percent, 25 percent top-up); Elevate Wealth expat retirement guide (DEWS in DIFC from 1 February 2020 at the same contribution rates). This article states the law and scheme rules as published and is not personal legal, financial or tax advice.