What is end-of-service gratuity?

Who is owed a gratuity

A full-time foreign worker becomes entitled once they have completed 1 year of continuous service; under that, nothing is due. The amount does not depend on who ended the contract — the current law sets no reduction for a worker who resigns.

Emirati employees are outside this rule: their end-of-service benefit comes under the pensions law. Employers may instead join the voluntary savings scheme of Cabinet Resolution No. 96 of 2023, paying monthly contributions into an approved fund in place of the gratuity. The DIFC runs its own scheme.

How much it is

The law counts days of basic wage: 21 days for each of the first 5 years, 30 days for each year after that, part years in proportion, and days of unpaid absence left out. The total may not exceed two years’ wage, and it is paid within 14 days of the contract ending.

An illustration of our own: a basic wage of AED 8,000 a month and exactly 3 years of service give 63 days’ wage. On annual basic ÷ 365, a day is AED 263.01, so the gratuity is AED 16,569.86. The law does not say how to turn a monthly wage into a day’s wage, and dividing the monthly basic by 30 gives a little more. The UAE gratuity calculator offers both.

Gratuity in a Ledgr final settlement

In Ledgr a leaver’s final settlement collects the salary to the last working day, leave, notice, loan balances and tax on one statement. Ledgr does not calculate UAE gratuity itself: the figure, worked out as above, is added to the settlement as a payment line, so it is paid and recorded with everything else the leaver is owed.