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End of Service Benefits For Employees in The Private Sector - The Official Portal of The UAE Government

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12 views5 pages

End of Service Benefits For Employees in The Private Sector - The Official Portal of The UAE Government

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vkjunu007
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© © All Rights Reserved
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! Jobs (/en/information-and-services/jobs) ! End of service benefits for employees in the private sector

End of service benefits for employees in the


private sector
This page contains information about the provisions and calculations for end of service benefits under
limited and unlimited contracts for expatriate workers in the UAE.

Provisions for end of service benefits


If the employee resigns of his or her own free will before completing one year, then they will not be
entitled to any gratuity pay.

The worker is entitled to a gratuity for the served fraction of a year, provided that he completes one year
of continuous service.

The end of service gratuity is calculated on basis of last wage which the employee was entitled to, namely
the basic salary. Hence, it will not include allowances such as housing, conveyance, utilities, furniture etc.

If the employee owes any money to the employer, the employer may deduct the amount from the
employee's gratuity.

Useful links

Termination of contracts and end of service gratuity


(https://www.mohre.gov.ae/handlers/download.ashx?YXNzZXQ9NDYw)- Ministry of Human
Resources and Emiratisation
:
Calculate your end of services benefits (https://www.mohre.gov.ae/en/end-of-service-
calculator.aspx)- Ministry of Human Resources and Emiratisation

Calculations for gratuity pay


Under limited contract

An employee who has spent one year or more in continuous service shall be entitled to an end of service
gratuity upon the termination of his service. The days of absence from work without pay shall not be
included in the calculation of the period of service and the gratuity shall be calculated as follows:
If an employee has served for less than 1 year, he is not entitled to any gratuity pay.
If an employee has served for more than 1 year but less than 5 years, he is entitled to full gratuity
pay based on 21 days' salary for each year of work.
If an employee has served more than 5 years, he is entitled to full gratuity of 30 days' salary for each
year of work following the first five years.

In all cases, the total gratuity shall not exceed the wage of two years.

Under unlimited Contract

In the event where the employer terminates an unlimited contract, calculation will be as follows:

If an employee has served for less than 1 year, he is not entitled to any gratuity pay.
If an employee has served more than 1 year but less than 5 years, he is entitled to 21 calendar days'
basic salary for each year of the first five years of work.
If an employee has served more than 5 years, he is entitled to 30 calendar days' basic salary for each
additional year, provided the entire compensation does not exceed two years' pay.

In the event where the employee under an unlimited contract resigns, calculation will be as follows:

If an employee resigns before completing 1 year of service, he is not entitled to any gratuity pay.
If an employee has served between 1 and 3 years, he is entitled to one third (1/3) of 21 days' basic
salary as gratuity pay.
If an employee has served between 3 and 5 years, he is entitled to two-thirds (2/3) of 21 days' basic
salary as gratuity pay.
If an employee has served more than 5 years, he is entitled to full 21 days' basic salary as gratuity
pay.

Useful links:

The UAE Labour Law (http://www.mohre.gov.ae/en/laws-legislation/labour-law.aspx) - Ministry of


Human Resources and Emiratisation
Resolutions and circulars (http://www.mohre.gov.ae/en/laws-legislation/announcements.aspx) -
:
Ministry of Human Resources and Emiratisation
Ministry of Human Resources and Emiratisation first annual Worker Welfare Report 2015
(http://wam.ae/en/details/1395295170380) - WAM
Federal Law No. 2 of 2015 on commercial companies
(http://ejustice.gov.ae/downloads/latest_laws2015/federal_law_2_2015_commercial_companies_en.pdf)
- Ministry of Justice (PDF, 150 KB)
International agreements (http://www.mohre.gov.ae/en/laws-legislation/international-
agreements.aspx) - Ministry of Human Resources and Emiratisation
eServices - (http://www.mohre.gov.ae/en/services/government-services.aspx) Ministry of Human
Resources and Emiratisation
Tasheel services (https://www.mohre.gov.ae/en/service-centers/tasheel-centers.aspx)
Enquiry about fees (http://www.mohre.gov.ae/en/services/enquiry-services.aspx) - Ministry of
Human Resources and Emiratisation
Minister of Labour's decree 765 of 2015 on Rules and Conditions for the Termination of Employment
Relations (http://www.mohre.gov.ae/handlers/download.ashx?YXNzZXQ9ODgw) (PDF, 150 KB)

Updated on 03 Jan 2022

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