What Is a Final Settlement in UAE?
A final settlement (also called End of Service Benefits or EOSB) is the total amount your employer must pay you when your employment ends. Under UAE Labour Law (Federal Decree Law No. 33 of 2021), every employee who has completed at least one year of continuous service is entitled to receive this.
It applies to employees who resign, are terminated, are retiring, or are on both limited and unlimited contracts.
What Does a UAE Final Settlement Include?
Your final settlement is not just gratuity. Here is everything you may be entitled to:
1. Gratuity Pay (End of Service Benefit)
Calculated based on your basic salary and years of service.
- First 5 years: 21 days of basic salary per year
- After 5 years: 30 days of basic salary per year
AED 5,000 · Worked 3 years21 days × 3 years = 63 days of salary
(5,000 ÷ 30) × 63 = AED 10,500 gratuity
2. Unused Annual Leave Payment
If you have unused vacation days remaining at the end of your employment, your employer must pay you for those days. This is calculated based on your full salary (not just basic).
AED 10,000/month(10,000 ÷ 30) × 15 = AED 5,000 leave payment
3. Notice Period Compensation
If your employer terminates you without serving the full notice period — or if you leave without serving notice — a financial compensation applies. The standard notice period in UAE is 30 days for most contracts.
4. Pending Salary or Overtime
Any unpaid salary, overtime, or allowances owed to you must be included in your final settlement.
5. Air Ticket Allowance
Many employment contracts in UAE include a provision for a return air ticket to your home country upon end of service. Check your contract for this benefit.
UAE Final Settlement Formula
Calculate Everything in One Click
Doxify's free UAE Final Settlement Calculator handles all components at once — gratuity, leave pay, and pending dues.
Limited Contract vs Unlimited Contract — Does It Matter?
| Scenario | Limited Contract | Unlimited Contract |
|---|---|---|
| Resigned before 1 year | No gratuity | No gratuity |
| Resigned, 1–3 years | 1/3 gratuity | 1/3 gratuity |
| Resigned, 3–5 years | 2/3 gratuity | 2/3 gratuity |
| Resigned, 5+ years | Full gratuity | Full gratuity |
| Terminated by employer | Full gratuity | Full gratuity |
Important Rules to Know
- Gratuity is calculated on basic salary only — housing, transport, and other allowances are excluded
- Maximum gratuity is capped at 2 years' basic salary
- Employer must settle all dues within 14 days of the employment end date
- If underpaid or refused, you can file a complaint with MOHRE
How to File a Complaint If You Are Not Paid
- 1Visit MOHRE website (mohre.gov.ae) or call 800 60 (free)
- 2File a labour complaint online or at a MOHRE office
- 3A mediator will be assigned within 2 weeks
- 4If unresolved, the case goes to the Labour Court