UAE Workers Entitled to Gratuity for Incomplete Years of Service

Expatriate employees in the United Arab Emirates’ private sector who leave their jobs before completing a full additional year of service may still qualify for end-of-service gratuity for the time they have worked, provided they have completed at least one year of continuous employment with the same employer.

The Ministry of Human Resources and Emiratisation (MoHRE) clarified that benefits for an incomplete year are calculated proportionately according to the employee’s actual period of service. The guidance forms part of the ministry’s efforts to help workers understand their entitlements and encourage businesses to comply with UAE labour regulations.

Under the traditional gratuity system, the calculation is based on an employee’s last basic salary, rather than the full salary package, which may include housing, transport and other allowances.

How UAE gratuity is calculated

For eligible expatriate employees covered by the standard private-sector labour law, the gratuity rate depends on the length of service.

Workers are generally entitled to 21 days of basic salary for each year of service during their first five years with an employer. From the sixth year onwards, the entitlement increases to 30 days of basic salary for every additional year.

Employees who have completed one year of continuous service can also receive a proportionate amount for a partial year, subject to the applicable legal conditions.

For example, an employee who has completed two full years and then works another six months may qualify for gratuity covering the additional six-month period. The final amount depends on the employee’s eligible service, last basic salary and the applicable statutory calculation.

The law also places a ceiling on the total entitlement: end-of-service gratuity under this system cannot exceed the equivalent of two years’ wages.

Workers should check their employment records, basic salary details and service dates when reviewing a gratuity calculation. Different employment arrangements may be subject to separate rules, so employees should confirm which provisions apply to their circumstances.

Employers must settle final dues within 14 days

MoHRE also highlighted the deadline for settling an employee’s final entitlements after an employment contract ends.

Employers must pay eligible end-of-service benefits and any outstanding wages within 14 days of the contract termination date, in accordance with the applicable labour regulations.

The deadline is intended to ensure that departing employees receive money owed to them without unnecessary delays. Workers who believe their final settlement has been calculated incorrectly or has not been paid on time can seek clarification through the relevant official channels.

Employees should retain copies of their employment contracts, salary records and termination documents to help verify their entitlements and resolve any disputes.

Voluntary Savings Scheme offers an alternative

The ministry also drew attention to the UAE’s voluntary Savings Scheme, which offers participating employers an alternative to the traditional gratuity arrangement.

Under the scheme, employers can direct eligible end-of-service contributions into approved investment funds. The funds are intended to preserve employees’ accrued benefits while offering the potential for investment returns, depending on the selected fund and its performance.

The scheme is designed to provide an alternative approach to managing end-of-service benefits and support employees’ longer-term financial security. Participation is subject to the scheme’s rules and applicable requirements; it should not be assumed that every employer or employee is automatically enrolled.

Workers encouraged to understand their rights

MoHRE continues to publish explanatory guidance on employment entitlements to help workers and employers understand their responsibilities under UAE labour law.

For employees leaving a job partway through the year, the key points are to establish eligibility, verify the period of service, check the basic salary used in the calculation and confirm that final payments are made within the prescribed deadline.

Employees with questions about individual cases should consult MoHRE or an authorised labour advisory service for guidance specific to their employment arrangement.