UAE end of service gratuity rules
End-of-service gratuity is the benefit a full-time foreign worker who has completed a year or more in continuous service is entitled to at the end of service, calculated according to the basic wage: a wage of 21 days for each year of the first five years of service, and a wage of 30 days for each year exceeding that period. Only that text is stated. No worked method for turning a monthly wage into a daily amount, no formula for another work pattern, and no details of any alternative scheme are added, because the text quoted does not state them.
The rules are stated as worded in Federal Decree-Law No. 33 of 2021, in the text as amended by Federal Decree-Law No. 14 of 2022. Later amendments are outside the scope of the text quoted, and no later wording is stated. Every article number below is from that text.
End of service gratuity federal coverage
Article 3 states that the Decree-Law applies to all establishments, employers and workers in the UAE private sector. Three groups are not subject to it: employees of federal and local government entities; employees of the armed forces, police and security; and domestic workers. The Cabinet may, on the Minister’s proposal, exclude any category and specify the legislation to apply to it.
That scope matters for every paragraph that follows. The formula in Article 51 is a federal private sector rule. Separate regimes outside that scope are outside the text quoted, and no rule from another regime is imported into the federal formula below.
Amount definitions
Article 1 defines the three terms on which the formula turns.
Basic Wage is the wage specified in the employment contract, paid to the worker for his work, excluding any other allowances or benefits in kind.
Wage is basic wage plus cash allowances and benefits in kind and allowances. Wage is therefore wider than Basic Wage, because it adds the allowances and benefits in kind that Basic Wage excludes.
Continuous Service is uninterrupted service with the same employer or its legal successor from the date of commencement of service.
The same Decree-Law states in Article 6(1) that it is not permissible to undertake work in the UAE, and the employer may not recruit or employ any worker, except after obtaining a work permit from the Ministry. Gratuity under Article 51 presupposes that permitted employment relationship.
Full-time formula in the law wording
Article 51(2) states that the full-time foreign worker who completed a year or more in continuous service is entitled to end-of-service benefits at the end of service, calculated according to the basic wage: a wage of 21 days for each year of the first five years of service, and a wage of 30 days for each year exceeding that period.
The two rates are the heart of the formula. The first five years attract 21 days for each year. Each year beyond five attracts 30 days. The calculation base throughout is the basic wage, as defined in Article 1, not the wider Wage definition. A reader who applies the wider Wage definition to the formula would be departing from the wording of Article 51(2).
Service under one year
The formula paragraph states the entitlement for a worker who has completed a year or more in continuous service. It does not state a formula for shorter service in the same paragraph, and none is added. The one year threshold is part of the entitlement wording, not a rounding rule, and it should be read with the pro-rata rule for parts of a year in the next section, which itself applies only where the worker has completed one year of continuous service.
National workers separate line
Article 51(1) states that the national worker is entitled to end-of-service benefits in accordance with the legislation regulating pensions and social securities in the State. That is the only national worker line stated. Nationals are visibly separate from the gratuity formula in Article 51(2), and no pension detail is added.
Part years absence wage and cap
Article 51(3) states that the foreign worker is entitled to a benefit for parts of the year in proportion to the period spent at work, provided he completed one year of continuous service. No further arithmetic is stated in the text quoted. A reader who needs a worked pro-rata calculation does not find one in Article 51(3) itself.
Article 51(4) states that unpaid days of absence from work are not included in the calculation of the service term. The text states the exclusion for unpaid days of absence only, and it is not extended to paid absence.
Article 51(5) states that benefits are calculated according to the last basic wage the worker was entitled to, for those paid monthly, weekly or daily, and according to the average daily wage stipulated in the provisions of the Decree-Law for piecework-paid workers. The last basic wage is therefore the wage that governs the calculation, not an earlier wage or an average over the service.
Article 51(6) states that the end-of-service benefits for the foreign worker in their entirety must not exceed two years’ wage. The cap applies to the benefits in their entirety. It is a ceiling on the total, not a separate rate, and it is not presented as one.
Employer deductions
Article 51(7) states that the employer may deduct from the benefits any amounts payable under the law or a judgment, in accordance with the conditions and procedures specified in the Implementing Regulation. The deduction power is therefore stated, but its conditions and procedures are left to the Implementing Regulation. No deduction procedure is stated, because the Decree-Law text quoted does not state one.
Alternative schemes and other work patterns
Article 51(8) states that the Cabinet may, on the Minister’s proposal and after coordination with the concerned authorities, approve other alternative end-of-service benefit schemes, and the issued resolution specifies the conditions, rules and mechanism of contribution. That power is stated without scheme detail. No scheme details appear in the Decree-Law text quoted.
Article 52 states that the Implementing Regulation defines the mechanism for end-of-service benefits for foreign workers on work patterns other than full-time. No mechanism appears in the Decree-Law text quoted.
Part-time formula position
No. Article 52 refers the matter to the Implementing Regulation. A reader who needs the mechanism for a work pattern other than full-time needs that regulation, not Article 51 alone. No formula for part-time work is supplied, because the Decree-Law text quoted does not state one.
Payment within 14 days
Article 53 states that the employer shall pay the worker, within 14 days from the end date of the contract term, his wages and all other entitlements stipulated in the Decree-Law, its implementing resolutions, the contract, or the establishment bylaws. The 14 day period runs from the end date of the contract term. The payment rule therefore covers wages and all other entitlements from the four sources listed in Article 53: the Decree-Law, its implementing resolutions, the contract, and the establishment bylaws.
Points not covered
The Decree-Law text quoted does not state a method for deriving a daily amount from a monthly wage, a mechanism for work patterns other than full-time, or details of any alternative scheme. No filing step or fee for gratuity is stated in the text quoted. The verified position is the narrower one set out above: scope, definitions, the full-time formula in the law’s own words, the cap and deduction rules, and the 14 day payment rule. A reader who needs those points does not guess them; the points are left as the text leaves them.
