UAE End-of-Service Gratuity: Four Levels Set Out for Foreign Workers in the Private Sector

The UAE end-of-service gratuity for foreign private sector workers is 21 days' wages for each of the first five years and 30 days' wages for each additional year, capped at two years' wages.

The ministry explained the rules through its social media accounts. Figures below are as reported, and the rules apply "in accordance with applicable regulations", so confirm your own case with the ministry. We credit the original report at the end.

UAE End-of-Service Gratuity at a Glance

• Who: foreign workers in the private sector
• First five years of service: 21 days' wages for each year
• Each additional year: 30 days' wages
• Fractions of a year: paid in proportion to the period worked, once a worker has completed one continuous year
• Maximum: total gratuity must not exceed two years' wages
• Payment deadline: within 14 days of the end of the contract

1. The First Period: 21 Days' Wages for Each of the First Five Years

The first level of the UAE end-of-service gratuity covers the opening years of a job. A worker is entitled to 21 days' wages for each of the first five years of service.

2. Years of Service: 30 Days' Wages for Each Additional Year

From the sixth year onwards, the rate rises. The ministry said the gratuity is calculated at 30 days' wages for each additional year of service. Staying longer with the same employer therefore increases the UAE end-of-service gratuity faster in later years than in the first five.

3. Fractions of a Year: Paid in Proportion

Workers are also entitled to gratuity for fractions of a year, in proportion to the period worked. The condition is that they have completed one continuous year of service. A worker who leaves before finishing a full year does not qualify under this rule.

4. The Maximum: Two Years' Wages

The fourth level is the ceiling. The total end-of-service gratuity must not exceed two years' wages, in accordance with applicable regulations.

A Worked Example of the UAE End-of-Service Gratuity

This illustration is our own and not an official calculation. It assumes a daily wage of Dh200 and exactly seven years of continuous service.

• Years 1 to 5: 5 years x 21 days x Dh200 = Dh21,000
• Years 6 and 7: 2 years x 30 days x Dh200 = Dh12,000
• Total before the cap: Dh33,000

The source does not say which parts of a salary count as "wages" for this calculation, so ask your employer or the ministry which wage figure applies to you.

When Must Employers Pay the UAE End-of-Service Gratuity? The 14-Day Rule

Employers are required to pay end-of-service benefits and any wages due to workers within 14 days of the termination of their contracts. Keep a copy of your contract, your final payslip and your termination date, because they help if there is a dispute.

The Optional Savings System and the UAE End-of-Service Gratuity

The ministry also highlighted an optional alternative to the traditional gratuity, known as the savings system. Under it, the amounts allocated for the end-of-service gratuity of employees in private sector companies are invested in leading investment funds approved by the Securities and Commodities Authority, so that workers' savings can grow through investment returns.

According to the ministry, the system aims to:

• Support the UAE's economic system
• Enhance the protection and well-being of the country's workforce
• Increase individual investment returns for beneficiaries
• Allow workers to make additional optional contributions
• Make the labour market more attractive and flexible by improving services for workers, and use opportunities to invest funds in economic activities in the country

The source does not say how to join the system or which funds are available, so ask your employer and the ministry. The savings system is optional, so check the terms before choosing it over the traditional gratuity.

What to Do if Your UAE End-of-Service Gratuity Is in Dispute

The ministry also highlighted three channels for registering labour complaints related to domestic workers when disputes between workers and employers cannot be settled amicably:

• The MOHRE UAE app
• The ministry's website
• The Labour Claims and Consultation Centre, on 80084

The source names these channels in connection with domestic workers. If your case involves a private sector company, confirm which channel applies on the MOHRE website or the UAE government portal.

Related Guides on Working in the UAE

• UAE work permit guide: all 13 types
• UAE health insurance guide
• Jobs in Dubai

UAE End-of-Service Gratuity FAQs

How is the UAE end-of-service gratuity calculated?

At 21 days' wages for each of the first five years of service and 30 days' wages for each additional year, with a maximum of two years' wages.

Do I get gratuity for part of a year?

Yes, in proportion to the period worked, provided you have completed one continuous year of service.

How soon must my employer pay my UAE end-of-service gratuity?

Within 14 days of the termination of your contract, together with any wages due.

What is the UAE gratuity savings system?

An optional alternative under which end-of-service amounts are invested in investment funds approved by the Securities and Commodities Authority.

Know Your UAE End-of-Service Gratuity Before You Leave a Job

The UAE end-of-service gratuity rests on four simple levels: 21 days' wages for the first five years, 30 days' wages for each year after that, a proportional share for part years and a cap of two years' wages. Check your contract, keep your records and confirm the details with the ministry before you resign or sign a final settlement. This article is general information and not legal advice.