The UAE Final Settlement: What You Are Owed When You Leave a Job

1. End-of-Service Gratuity (Article 51)

The largest component for most leavers. After at least one year of continuous service, you accrue 21 days of basic salary per year for the first five years, and 30 days per year thereafter. The daily rate is your monthly basic salary divided by 30, and the total gratuity is legally capped at 24 months (two years) of basic salary under Article 51(4).

Two details people often get wrong: allowances are excluded (gratuity is computed on basic salary only), and since Federal Decree-Law No. 33 of 2021 took effect, resignation no longer reduces your gratuity — the old rules that cut payouts for resigning employees were abolished. Unpaid leave days are deducted from your period of service before the calculation.

2. Unused Annual Leave (Article 29)

Legally accrued but untaken annual leave must be cashed out when you leave, at your basic daily rate (basic ÷ 30) per remaining day. Leave accrues at 30 calendar days per year after your first year (2 days per month between six months and a year), and encashment is paid in addition to your gratuity — it does not count toward the 24-month cap.

3. Notice Period Pay (Articles 43)

Every termination of an ongoing contract requires written notice of 30 to 90 days (as set in your contract). Whoever fails to honour the notice owes the other party compensation in lieu equal to the wage for the unworked portion — and unlike gratuity, this is based on your full wage including allowances. If you work your notice normally, this line is simply your regular salary for those days.

4. Outstanding Salary and Other Amounts

Any days worked but not yet paid are settled at your full daily wage. Depending on your contract, the settlement may also include pro-rated commissions or bonuses already earned, and reimbursement of approved expenses. Conversely, an employer may lawfully deduct documented amounts you owe — such as outstanding loans against salary — but cannot charge you for recruitment or visa costs, which are the employer's legal responsibility.

Estimate all four components in one pass with our Final Settlement Calculator — it applies the gratuity cap, the correct wage basis per component, and itemises the result.

5. A Worked Example

6. The 14-Day Deadline and Escalation

The Labour Law requires employers to pay all wages and entitlements within 14 days of the contract end date. If the deadline passes, document your last working day and the amounts due, request payment in writing, and if unresolved file a complaint with MoHRE — mediation is attempted first, and unresolved disputes are referred to the labour courts. Employees' wage claims below certain value thresholds are exempt from court fees.

Practical tip: do not sign a final settlement acknowledgment that says "received in full" until the money has actually cleared, and reconcile the employer's figures against your own calculation first.