Author Credentials: This guide is prepared by Jazaa’s HR payroll and compliance team with experience advising UAE employers on labour law compliance, gratuity calculations, and employee benefits administration. Our team includes payroll specialists who process gratuity calculations for UAE companies, HR advisors familiar with MOHRE requirements, and financial consultants who audit employer labour cost structures.
Scope of This Guidance: This article provides general information about end of service gratuity calculation for UAE employers as of February 2026. It addresses Federal Decree-Law No. 33 of 2021 requirements applicable to private sector employees on limited contracts working in mainland UAE.
This information does not constitute legal advice. For specific guidance tailored to your company’s employee contracts, payroll systems, and calculation scenarios, consultation with qualified HR advisors familiar with current MOHRE requirements and your individual circumstances is recommended. Contact Jazaa for professional support.
Understanding End of Service Gratuity Basics and Eligibility
End of service gratuity calculation begins with understanding which employees qualify for benefits and under what circumstances payment becomes due. The Ministry of Human Resources and Emiratisation (MOHRE) establishes clear eligibility rules that every employer must understand.
What is End of Service Gratuity
End of service gratuity represents a mandatory employer payment to employees who complete at least one year of continuous service. According to Article 51 of Federal Decree-Law No. 33 of 2021, this payment acknowledges employee tenure and provides financial transition support when employment ends through resignation, termination, retirement, or contract expiration.
The gratuity amount in end of service gratuity calculation increases proportionally with service duration. Longer-serving employees receive larger payments, creating a structure that incentivizes employee retention while ensuring fair compensation for extended service contributions.
Minimum Service Requirement
Employees must complete at least one full year of continuous service to qualify for end of service gratuity. Service periods shorter than one year do not trigger gratuity obligations. Employees leaving before completing 12 months receive only their final salary and unused annual leave balances.
The one-year threshold counts from employment start date through final working day including notice period. MOHRE confirms that “the full-time foreign worker, who completed a year or more in continuous service, shall be entitled to end of service benefits at the end of his service.”
Who Qualifies for Gratuity
According to Article 3 of Federal Decree-Law No. 33 of 2021, all employees working under UAE employment contracts in the private sector qualify for end of service gratuity after completing one year of service, regardless of nationality, position level, or salary amount. This includes full-time permanent employees on limited contracts, part-time employees (pro-rated based on working hours), fixed-term contract employees who complete contract duration, and employees working in mainland UAE.
Who Does Not Qualify
Article 3 of the Decree-Law specifies that the following categories shall not be subject to its provisions: employees of federal and local government entities, employees of the armed forces, police and security, and domestic workers who fall under separate legislation (Federal Decree-Law No. 9 of 2022).
When Gratuity Becomes Payable
Article 42 of Federal Decree-Law No. 33 of 2021 specifies that end of service gratuity calculation and payment obligations trigger upon employment contract termination through: written agreement of both parties, expiry of the term specified in the contract, termination based on the wish of either party with proper notice, employer’s death if the subject of the contract is related to its entity, worker’s death or full permanent inability to work, a final judgment issued against the worker by a freedom-restricting penalty for a period of not less than three months, closing the establishment permanently, bankruptcy or insolvency of the employer, or the worker’s failure to fulfill the conditions for renewing the work permit.
Actionable Takeaway: End of service gratuity calculation applies to all private sector employees completing at least one year of continuous service under Federal Decree-Law No. 33 of 2021. Payment obligations arise whenever employment ends, regardless of termination reason. Establish clear systems tracking employee start dates, service duration, and contract status ensuring accurate eligibility determination. Contact Jazaa for payroll system implementation.
The Complete End of Service Gratuity Calculation Formula
Article 51 of Federal Decree-Law No. 33 of 2021 establishes the standardized end of service gratuity calculation formula. Understanding these calculation mechanics enables accurate gratuity determination for every employee departure.
The Basic Formula for Limited Contracts
According to MOHRE’s official guidance, end of service gratuity calculation follows this structure:
Years 1-5: A wage of 21 days for each year of the first five years of service
Years 6+: A wage of 30 days for each year exceeding such period
MOHRE confirms that “the full-time foreign worker, who completed a year or more in continuous service, shall be entitled to end of service benefits at the end of his service, calculated according to the basic wage.”
Step-by-Step Calculation Process
Based on Article 51 of Federal Decree-Law No. 33 of 2021, the calculation process involves determining total service duration in years and months, calculating daily basic salary (monthly basic divided by 30), calculating gratuity for first five years (21 days multiplied by years multiplied by daily basic), calculating gratuity for years beyond five (30 days multiplied by years multiplied by daily basic), and adding both amounts for total gratuity.
Practical Calculation Example
Consider an employee with the following profile:
- Basic salary: AED 6,000 monthly
- Service duration: 7 years, 3 months
- Contract type: Limited
Calculation:
Daily basic salary: AED 6,000 divided by 30 = AED 200 per day
First 5 years: 21 days multiplied by 5 years multiplied by AED 200 = AED 21,000
Remaining 2.25 years (27 months): 30 days multiplied by 2.25 years multiplied by AED 200 = AED 13,500
Total gratuity: AED 21,000 + AED 13,500 = AED 34,500
Partial Year Calculation
MOHRE confirms that “the foreign worker shall be entitled to a benefit for parts of the year in proportion to the period spent at work, provided that he completed one year of continuous service.” An employee working 3 years and 7 months receives gratuity for 3.58 years (43 months divided by 12 months).
Accurate calculations use exact month counts converted to decimal years for fairness and compliance with Federal Decree-Law No. 33 of 2021.
Maximum Gratuity Cap
Article 51(6) of Federal Decree-Law No. 33 of 2021 states that “it is required based on the foregoing that the end of service benefits for the foreign worker in its entirety does not exceed two years’ wage.”
MOHRE confirms this cap: an employee with 25 years of service and AED 10,000 monthly basic salary receives maximum AED 240,000 gratuity (24 months multiplied by AED 10,000), not the calculated higher amount based on the formula.
Actionable Takeaway: End of service gratuity calculation uses 21 days per year for years 1-5 and 30 days per year beyond that, with two-year basic salary maximum cap under Article 51 of Federal Decree-Law No. 33 of 2021. Calculate daily basic salary, apply formulas to completed years and months, and sum both periods. Jazaa’s payroll calculation services provide automated gratuity calculation tools preventing manual errors.
Calculating Service Duration for Gratuity Purposes
Accurate service duration determination represents the foundation of correct end of service gratuity calculation. Federal Decree-Law No. 33 of 2021 provides specific guidance on counting service periods.
Determining Employment Start Date
Article 1 of Federal Decree-Law No. 33 of 2021 defines continuous service as “uninterrupted service with the same employer or its legal successor, from the date of commencement of work.”
Service duration for end of service gratuity calculation typically begins from the employment visa issuance date or contract start date, whichever is later. Best practice involves aligning contract start dates with visa issuance dates, eliminating ambiguity in gratuity calculations.
Counting the Final Working Day
Article 43 of Federal Decree-Law No. 33 of 2021 states that “the employment contract continues to be valid throughout the notice period referred to in this Article and is terminated upon expiry of such period.”
The final working day in end of service gratuity calculation includes the notice period completion date, not resignation letter date. An employee submitting resignation on March 1 with 30-day notice period completes service on March 30, making March 30 the final working day for gratuity calculation.
Unpaid Leave Impact on Service Duration
Article 51(4) of Federal Decree-Law No. 33 of 2021 explicitly states that “the unpaid days of absence from work shall not be included in the calculation of the service term.”
Each day of unpaid leave reduces service duration in end of service gratuity calculation. An employee with three years’ service but 45 days unpaid leave has actual service of 2.88 years (36 months minus 1.5 months). Paid annual leave, sick leave within allowances, and public holidays do not reduce service duration.
Contract Renewals and Continuous Service
Article 8(4) of Federal Decree-Law No. 33 of 2021 confirms that “in case of extending or renewing the contract, the new term(s) shall be considered an extension of the original term and shall be added to it while calculating the worker’s continuous term of service.”
Employees working multiple consecutive limited contracts with the same employer accumulate continuous service for gratuity purposes. Service duration includes all contracts combined, not resetting with each renewal.
Actionable Takeaway: Service duration for end of service gratuity calculation counts from employment start through final working day including notice periods under Article 43 of Federal Decree-Law No. 33 of 2021, minus any unpaid leave days per Article 51(4). Maintain detailed records of start dates, unpaid leave, and notice periods. Jazaa’s HR management systems track service timelines automatically.
Basic Salary vs Gross Salary in Gratuity Calculations
The most critical distinction in end of service gratuity calculation involves basic salary versus gross salary. MOHRE explicitly confirms that “the end-of-service gratuity is calculated according to the last paid basic salary only, with no allowances.”
Understanding Basic Salary
Article 1 of Federal Decree-Law No. 33 of 2021 defines basic wage as “the wage stipulated in the employment contract, which is paid to the worker in consideration of his work under the employment contract, on a monthly, weekly, daily, hourly or piecework basis, and which does not include any other allowances or benefits in-kind.”
Basic salary in end of service gratuity calculation represents the fixed monthly salary component specified in employment contracts, excluding all allowances. This typically comprises 40-60% of gross salary for most UAE employment contracts.
Example salary breakdown:
- Basic salary: AED 6,000
- Housing allowance: AED 3,000
- Transportation allowance: AED 1,000 Gross salary: AED 10,000
Gratuity calculates on AED 6,000 (basic), NOT AED 10,000 (gross).
Why Basic Salary Matters
Article 51(5) of Federal Decree-Law No. 33 of 2021 states that “the end of service benefits shall be calculated according to the last basic wage the worker was entitled to, with respect to those who receive their wages on a monthly, weekly or daily basis.”
MOHRE reiterates that gratuity calculation uses basic salary only. This legal requirement reduces employer gratuity obligations compared to gross salary calculations, creating legitimate employer cost savings when structuring compensation packages.
Identifying Basic Salary in Contracts
Article 8 of Federal Decree-Law No. 33 of 2021 requires the employment contract to state “the agreed wage including allowances and supplements.”
Cabinet Resolution No. 1 of 2022, Article 10 further specifies that “the employment contract should include… the wage agreed upon including the benefits and allowances.”
Employment contracts must clearly specify basic salary as a distinct line item. Best practice requires contracts explicitly stating basic salary, housing allowance, transportation allowance, and total gross salary separately.
Salary Increases During Service
Article 51(5) of Federal Decree-Law No. 33 of 2021 confirms that end of service gratuity calculation uses “the last basic wage the worker was entitled to.”
An employee earning AED 5,000 basic for three years then AED 7,000 basic for two years calculates gratuity using AED 7,000 across all five years. This approach benefits employees who receive salary increases, as their final higher salary applies retroactively to earlier service years for gratuity purposes.
Special Gratuity Calculation Scenarios
End of service gratuity calculation becomes more complex in specific scenarios. Federal Decree-Law No. 33 of 2021 and its implementing regulations address these special cases.
Employee Death During Service
Article 15 of Federal Decree-Law No. 33 of 2021 states that “in case of the worker’s death, the employer may hand over the worker’s family, any wages or financial entitlements due to the worker, in addition to the end-of-service benefits the worker is entitled to… within a period not exceeding (10) ten days from the date of death or from the date on which the employer became aware of the death of the worker.”
The Article further specifies that “the worker may specify in writing the concerned person from his family to receive his rights in case of his death.” Employers should request legal heir documentation proving inheritance rights before releasing gratuity payments.
Termination for Disciplinary Reasons
Article 44 of Federal Decree-Law No. 33 of 2021 permits dismissal without notice for serious violations including impersonation, gross financial losses, safety violations, failure to perform basic duties, disclosing work secrets, intoxication, assault, absence exceeding limits, exploitation of position, or joining another establishment without following rules.
However, gratuity entitlement remains payable even in disciplinary termination situations. Employers believing employees caused damages through misconduct must pursue separate legal claims for compensation. Article 47(3) confirms that unlawful termination provisions “shall not prejudice the right of the worker to obtain a notice period allowance and end of service benefits payable to him.”
Part-Time Employee Calculations
Article 52 of Federal Decree-Law No. 33 of 2021 addresses part-time workers, and Article 30 of Cabinet Resolution No. 1 of 2022 provides the specific mechanism.
MOHRE confirms that “the end of service benefits for workers working in part-time or job-sharing patterns and not on a full-time basis shall be calculated pursuant to the following: The number of working hours set out in the employment contract per year divided by the number of working hours in the full-time contract per year multiplied by 100 equal to the percentage multiplied by the value of the end of service benefit for the full-time employment contract.”
Temporary Employment
Article 30(2) of Cabinet Resolution No. 1 of 2022 states that “the end of service benefit shall not apply in the case of temporary employment if its duration is less than one year.”
MOHRE confirms this exception for temporary workers.
Deductions from Gratuity
Article 51(7) of Federal Decree-Law No. 33 of 2021 permits the employer to “deduct from the end of service benefits any amounts payable under the law or a judgment, in accordance with the conditions and procedures specified in the Implementing Regulation.”
Article 29 of Cabinet Resolution No. 1 of 2022 specifies the permitted deductions, including amounts owed by the worker to recover loans or overpayment, amounts for contribution to end of service or retirement pensions, amounts deducted for violations according to establishment penalty regulations, debts owed pursuant to court rulings, and amounts for repairing damage caused by the worker due to fault or violation.
Gratuity Payment Timeline and Obligations
End of service gratuity calculation represents only half the employer responsibility. Federal Decree-Law No. 33 of 2021 establishes specific payment obligations and timelines.
Mandatory Payment Timeline
Article 53 of Federal Decree-Law No. 33 of 2021 states that “the employer shall pay to the worker, within (14) fourteen days from the end date of the contract term, his wages and all his other entitlements stipulated herein and resolutions issued for its implementation, the contract or the establishment’s by-laws.”
The 14-day period begins from the employee’s final working day (including completed notice period), not resignation letter date. Delays beyond 14 days without legitimate justification expose employers to penalties through MOHRE complaints.
Gratuity Payment Method
Article 16 of Cabinet Resolution No. 1 of 2022 requires that “all establishments registered with the Ministry shall pay the wages of their workers on their due date through the Wages Protection System or through any other system approved by the Ministry.”
Gratuity payments should process through the Wage Protection System (WPS), creating clear payment trails. Bank transfers to employee accounts registered with WPS offer strongest documentation, preventing disputes about payment amounts or timing.
Final Settlement Components
Complete final settlement in end of service gratuity calculation includes multiple components beyond gratuity: final month salary (pro-rated to last working day), unused annual leave balance (cash payment for untaken days), end of service gratuity, and any other contractual entitlements.
Employers should provide itemized final settlement statements showing each component separately. Article 13(11) of Federal Decree-Law No. 33 of 2021 requires employers to give employees “a certificate of experience, without fees, indicating the date of his commencement of work, the date of its expiry, his entire service term, job title or type of work he was performing, the last wage he was receiving and the reason for the termination of the employment contract.”
Failure to Pay Consequences
Article 54 of Federal Decree-Law No. 33 of 2021 provides that if disputes arise regarding rights accrued under the Decree-Law, workers may submit complaints to MOHRE, which “shall examine the complaint and take the necessary measures to settle the dispute between them amicably.”
MOHRE confirms that “the employee or the employer has the right to file a complaint within 30 days from the date of the breach in obligations by the other party.”
Article 16(2) of Cabinet Resolution No. 1 of 2022 states that “the Ministry may take all the legal actions and measures provided for in the Decree-Law, this Resolution, and the relevant Legal Regulations against the establishment in the event of non-payment of the agreed wage.”
Actionable Takeaway: End of service gratuity payment must occur within 14 days of employment termination under Article 53 of Federal Decree-Law No. 33 of 2021 through WPS systems. Provide itemized final settlements showing all components separately. Maintain documentation supporting calculations and payments. Jazaa’s payroll processing services handle final settlement calculations ensuring timely, compliant gratuity disbursements.
The Voluntary Savings Scheme Alternative
Cabinet Resolution No. 96 of 2023 introduced the Voluntary Alternative End-of-Service Benefits Scheme, providing UAE employers with an alternative to traditional end of service gratuity calculation.
Overview of the Savings Scheme
According to MOHRE, “the new Scheme invests end-of-service gratuity (or end-of-service benefits) of employees who are registered by their employers that subscribe to the Scheme. The end-of-service benefits would be invested by well-proven investment funds approved by MoHRE and SCA, with the aim of achieving investment returns for the employees.”
How the Scheme Works
MOHRE explains that “employers who are interested in subscribing to the Savings Scheme can submit a request to the Ministry through its service channels, select one of the approved investment funds, and pay the subscription fees for the workers they wish to register.”
For employees enrolled in the Savings Scheme, MOHRE confirms that “workers will keep the gratuity they earned so far (prior to subscription to the new Scheme), however, the existing end-of-service gratuity system… will be suspended for employees registered in the new Scheme, and the financial entitlements they have accrued are calculated based on their years of service, up to the date they join the new Scheme.”
Cost Considerations for Employers
MOHRE highlights that “the medium-term cost for employers participating in the Savings Scheme is lower than the cost for the current end-of-service gratuity system, as the contribution is calculated based on the basic salary in the month it was paid, not on the basic salary at the end of the service, which is always higher.”
Employee Additional Contributions
MOHRE confirms that “workers have the option to make additional contributions of approximately 25% of their total annual salary to increase their investment returns. They can also withdraw some or all of the contributions and investment returns, based on the terms and conditions of the system.”
Traditional Gratuity Remains Default
The Savings Scheme is voluntary. Employers who do not enroll continue using traditional end of service gratuity calculation methods under Article 51 of Federal Decree-Law No. 33 of 2021.
Common Calculation Mistakes and How to Avoid Them
Employers frequently make end of service gratuity calculation errors creating underpayment, overpayment, or disputes. Understanding common mistakes enables prevention through better systems and processes aligned with Federal Decree-Law No. 33 of 2021.
Mistake 1: Using Gross Salary Instead of Basic
The most common end of service gratuity calculation error involves using gross salary rather than basic salary. MOHRE explicitly states that “the end-of-service gratuity is calculated according to the last paid basic salary only, with no allowances.”
An employee with AED 10,000 gross (AED 6,000 basic) calculated using gross receives 67% excessive payment.
Prevention: Always extract basic salary from contracts explicitly per Article 1 of Federal Decree-Law No. 33 of 2021. Never assume gross salary equals basic unless contracts specify 100% basic with no allowances.
Mistake 2: Incorrect Service Duration Counting
Service duration errors in end of service gratuity calculation occur when employers count from wrong start dates, exclude notice periods from service, or fail to deduct unpaid leave per Article 51(4).
Prevention: Maintain clear employment records showing visa dates, contract start dates, notice period dates, and unpaid leave periods. Use automated systems tracking these dates preventing manual counting errors.
Mistake 3: Forgetting the Two-Year Maximum Cap
Long-serving employees sometimes receive excessive gratuity when employers forget the two-year basic salary maximum cap under Article 51(6).
Prevention: Program maximum cap logic into automated calculation systems. Review calculations for employees with 10+ years service ensuring cap applications.
Mistake 4: Ignoring Partial Years
Employers sometimes round service duration to nearest whole year rather than calculating exact months. An employee with 3 years, 7 months service calculated as “3 years” loses gratuity entitlement for 7 months.
MOHRE confirms that workers are “entitled to a benefit for parts of the year in proportion to the period spent at work.”
Prevention: Calculate service duration to exact months, converting to decimal years for formula application. Never round down service periods.
Mistake 5: Delayed Payments Without Justification
Some employers delay gratuity payments beyond the 14-day requirement under Article 53 of Federal Decree-Law No. 33 of 2021 without legitimate processing reasons.
Prevention: Establish final settlement procedures beginning when employees submit notice, allowing calculations during notice periods. Process payments within days of final working dates.
Mistake 6: Poor Documentation of Calculations
Employers sometimes pay gratuity without providing detailed calculations showing how amounts were determined. Employees receiving unexplained lump sums frequently question amounts.
Prevention: Always provide itemized final settlement statements showing basic salary used, service duration counted, days per year applied, total gratuity amount, and any deductions with justification per Cabinet Resolution No. 1 of 2022.
End of Service Gratuity Calculation Requirements
| Requirement | Provision | Source |
|---|---|---|
| Minimum Service for Eligibility | One year continuous service | Article 51(2), Federal Decree-Law No. 33 of 2021 |
| Gratuity Rate Years 1-5 | 21 days basic salary per year | Article 51(2)(a), Federal Decree-Law No. 33 of 2021 |
| Gratuity Rate Years 6+ | 30 days basic salary per year | Article 51(2)(b), Federal Decree-Law No. 33 of 2021 |
| Maximum Gratuity Cap | Two years’ basic wage | Article 51(6), Federal Decree-Law No. 33 of 2021 |
| Salary Basis | Last basic wage only (no allowances) | Article 51(5), Federal Decree-Law No. 33 of 2021; MOHRE FAQ |
| Unpaid Leave Treatment | Not included in service term | Article 51(4), Federal Decree-Law No. 33 of 2021 |
| Partial Year Entitlement | Pro-rated for completed service | Article 51(3), Federal Decree-Law No. 33 of 2021 |
| Payment Deadline | 14 days from contract end | Article 53, Federal Decree-Law No. 33 of 2021 |
| Payment Method | Wage Protection System | Article 16, Cabinet Resolution No. 1 of 2022 |
| Part-Time Calculation | Proportional to working hours | Article 30, Cabinet Resolution No. 1 of 2022; MOHRE FAQ |
| Death Payment Timeline | 10 days from death or awareness | Article 15, Federal Decree-Law No. 33 of 2021 |
| Complaint Filing Period | 30 days from breach | MOHRE FAQ |
| Contract Renewal Service | Added to continuous service term | Article 8(4), Federal Decree-Law No. 33 of 2021 |
| Alternative Scheme | Voluntary Savings Scheme | Cabinet Resolution No. 96 of 2023 |
Frequently Asked Questions
1. How is end of service gratuity calculated in UAE?
End of service gratuity calculation uses 21 days of basic salary per year for the first five years of service, then 30 days of basic salary per year for service beyond five years, according to Article 51 of Federal Decree-Law No. 33 of 2021. Calculate daily basic salary (monthly basic divided by 30), multiply by applicable days and years, sum both periods, and apply the two-year basic salary maximum cap.
2. What is the difference between basic salary and gross salary for gratuity?
MOHRE confirms that "the end-of-service gratuity is calculated according to the last paid basic salary only, with no allowances." Article 1 of Federal Decree-Law No. 33 of 2021 defines basic wage as the wage stipulated in the employment contract "which does not include any other allowances or benefits in-kind." Never use gross salary for gratuity calculations.
3. When must employers pay end of service gratuity?
Article 53 of Federal Decree-Law No. 33 of 2021 requires employers to pay gratuity "within (14) fourteen days from the end date of the contract term." Payments should process through the Wage Protection System per Cabinet Resolution No. 1 of 2022.
4. Does unpaid leave affect gratuity calculations?
Yes. Article 51(4) of Federal Decree-Law No. 33 of 2021 states that "the unpaid days of absence from work shall not be included in the calculation of the service term." Each day of unpaid leave reduces total service duration for gratuity purposes. Paid annual leave and sick leave within allowances do not reduce service.
5. What is the maximum gratuity amount an employee can receive?
Article 51(6) of Federal Decree-Law No. 33 of 2021 caps maximum gratuity at "two years' wage" regardless of actual service duration. MOHRE confirms this limit.
6. Can employers deduct amounts from gratuity payments?
Article 51(7) of Federal Decree-Law No. 33 of 2021 permits deductions for "amounts payable under the law or a judgment." Article 29 of Cabinet Resolution No. 1 of 2022 specifies permitted deductions including loan recovery, penalty amounts, court-ordered debts, and damage compensation.
7. How is gratuity calculated for employees with salary increases during service?
Article 51(5) of Federal Decree-Law No. 33 of 2021 confirms gratuity is calculated using "the last basic wage the worker was entitled to." If an employee earned AED 5,000 basic for three years then AED 7,000 for two years, calculate entire five years using AED 7,000 basic.
8. Do employees need to complete full years to receive gratuity?
No. Article 51(3) of Federal Decree-Law No. 33 of 2021 states that "the foreign worker shall be entitled to a benefit for parts of the year in proportion to the period spent at work, provided that he completed one year of continuous service." Never round down partial years.
9. What happens to gratuity if an employee dies during service?
Article 15 of Federal Decree-Law No. 33 of 2021 requires the employer to hand over gratuity to the worker's family "within a period not exceeding (10) ten days from the date of death or from the date on which the employer became aware of the death."
10. How is gratuity calculated for part-time employees?
MOHRE confirms that part-time gratuity is calculated by dividing "the number of working hours set out in the employment contract per year" by "the number of working hours in the full-time contract per year" multiplied by 100, then multiplying this percentage by the full-time gratuity value. This formula is specified in Article 30 of Cabinet Resolution No. 1 of 2022.
11. What is the Voluntary Savings Scheme for end of service benefits?
Cabinet Resolution No. 96 of 2023 established the Voluntary Alternative End-of-Service Benefits Scheme. MOHRE explains that employers can subscribe to invest employee gratuity in approved investment funds, with workers keeping gratuity earned before enrollment while new contributions are invested.
12. Who is excluded from end of service gratuity provisions?
Article 3 of Federal Decree-Law No. 33 of 2021 specifies that employees of federal and local government entities, employees of the armed forces, police and security, and domestic workers are not subject to its provisions. Domestic workers fall under Federal Decree-Law No. 9 of 2022.
13. How does contract renewal affect service duration?
Article 8(4) of Federal Decree-Law No. 33 of 2021 confirms that "in case of extending or renewing the contract, the new term(s) shall be considered an extension of the original term and shall be added to it while calculating the worker's continuous term of service."
14. Where can employees file complaints about gratuity non-payment?
Article 54 of Federal Decree-Law No. 33 of 2021 allows workers to submit complaints to MOHRE. The Ministry "shall examine the complaint and take the necessary measures to settle the dispute between them amicably." Workers have 30 days from the breach date to file complaints.
15. Does temporary employment qualify for gratuity?
Article 30(2) of Cabinet Resolution No. 1 of 2022 states that "the end of service benefit shall not apply in the case of temporary employment if its duration is less than one year." MOHRE confirms this exception.
Disclaimer
General Information Only
This article provides general information about end of service gratuity calculation for UAE private sector employers as of February 2026. The content is intended for educational purposes and general guidance regarding Federal Decree-Law No. 33 of 2021 and related regulations.
Not Professional Advice
This information does not constitute legal, tax, financial, or professional advice. The calculation examples and scenarios reflect typical situations, but individual cases may involve complexities requiring professional assessment. Before making final gratuity payment decisions or resolving employee disputes, consultation with qualified HR advisors and employment lawyers familiar with current MOHRE requirements and your specific circumstances is strongly recommended.
Information Currency
Labour law provisions, regulatory interpretations, and Ministry guidance evolve continuously. While this content reflects understanding of regulations as of the publication date, readers should verify current requirements with official government sources including the Ministry of Human Resources and Emiratisation.
Regulatory Changes
UAE employment regulations may change through new decrees, ministerial resolutions, or cabinet decisions. The Voluntary Savings Scheme and other alternative arrangements may modify traditional gratuity obligations. Employers should monitor official MOHRE communications for updates.
Liability Limitation
Neither Jazaa nor its representatives accept liability for actions taken based on this information without appropriate professional consultation. Individual employment circumstances vary substantially, and specific advice tailored to your company’s employee contracts, payroll systems, and calculation scenarios requires direct professional engagement.
Contact for Specific Guidance
For professional assistance with end of service gratuity calculation, payroll system implementation, or labour law compliance, contact Jazaa to discuss your specific requirements with qualified advisors.
