Dubai, United Arab Emirates – September 25, 2026 – Employees in the UAE often discover their final settlement is incorrect after accepting it. End‑of‑service gratuity is a statutory right, not a discretionary bonus, and the amount is set by law.
Who is eligible?
Under Federal Decree‑Law No. 33 of 2021, any private‑sector employee who completes at least one continuous year of service is entitled to a gratuity. Unpaid leave does not count toward that year. The reason for termination – whether contract expiry, dismissal or resignation – does not affect eligibility.
How the gratuity is calculated
Gratuity is calculated on basic salary only; housing, transport and other allowances are excluded. The formula is:
- Less than 1 year of service – no gratuity
- 1 to 5 years – 21 days of basic salary for each year
- More than 5 years – 21 days per year for the first five years, then 30 days per year thereafter
The total gratuity cannot exceed two years’ basic pay. For example, an employee earning AED 10,000 per month who works six years receives 21 days for each of the first five years and 30 days for the sixth, roughly AED 34,965.
When gratuity can be reduced or withheld
Article 44 lists limited grounds for withholding gratuity, such as assaulting a colleague, disclosing confidential workplace information, or exceeding 20 non‑consecutive days of unjustified absence. Redundancy, proper resignation, or ordinary disputes are not valid reasons to cut the payment.
Employers may deduct genuine debts owed by the employee, but they cannot withhold gratuity until a settlement is signed or a claim is withdrawn.
Other end‑of‑service entitlements
In addition to gratuity, a final settlement typically includes payment for unused annual leave (basic rate), notice pay or payment in lieu, any outstanding wages and approved overtime, and a repatriation air ticket unless the employee moves directly to another UAE employer. Earned bonuses or commissions should also be paid.
Senior staff may have additional components such as share schemes or deferred bonuses, which are handled separately from the statutory formula.
How to claim unpaid benefits
Employers have 14 days from contract termination to settle all dues. If payment is not received, the employee should request a written calculation and keep a copy of the request.
If the employer does not respond, the employee can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE) at no cost, either via the MOHRE app or call centre. A mediation attempt follows; if mediation fails within the statutory window, the case is referred to the Labour Court. Claims below a set monetary threshold are exempt from court fees.
All claims must be filed within one year of the entitlement arising; delays are the most common reason claims are dismissed.
Special considerations for free zones
Free‑zone jurisdictions such as DIFC and ADGM have their own employment regimes and courts, which may affect both procedure and calculation. Employees should verify which legal framework governs their contract before proceeding.
Getting help
Lawzana, a Dubai‑based legal services firm, lists verified law firms that can review settlement calculations. Employees should bring their contract, payslips, and the employer’s calculation to a consultation to confirm the correct basic salary figure and verify any potential reductions.
Original reporting: KTBS 3 (Shreveport) — read the source article.
