Career & Salary

What Your Employer Owes You When You Leave a UAE Job

Published 21 Jul 2026 · Updated 12 Aug 2026 · 3 min read · By UAE Info Portal Editorial Team, Editorial Team

Reviewed by UAE Info Portal Editorial Team, Editorial Team

Key Takeaways

  • A settlement uses THREE different salary bases, not one — gratuity and unused leave use basic salary only; notice pay and outstanding salary use the full package.
  • On a AED 15,000 package (10,000 basic + 5,000 allowances), 20 unused leave days are worth AED 6,667, not AED 10,000 — a common point of dispute.
  • Gratuity: 21 days basic/year (first 5 years), 30 days/year beyond, capped at 2 years' basic salary; under 1 year of service = no entitlement.
  • Leave: 30 days/year accrue after 1 year of service; 2 days/month between 6-12 months; nothing below 6 months (though those months still count toward gratuity service).
  • Full settlement (not just gratuity) is due within 14 days of the last working day.
  • Since 1 June 2026, final settlements must flow through WPS — a cash-paid settlement creates a compliance problem for the employer on top of any dispute.

Most people leaving a UAE job know they are owed gratuity. Far fewer know that gratuity is one of four or five separate entitlements, or that they are calculated on different salary figures — which is where settlements quietly go wrong.

The three salary bases

This is the part that causes more disputes at MOHRE than anything else. A settlement does not use one salary figure. It uses three.

ComponentCalculated onAuthority
End-of-service gratuityBasic salary onlyArticle 51
Unused annual leaveBasic salary onlyArticle 29(9)
Pay in lieu of noticeFull packageArticle 43
Outstanding salaryFull packageContractual

The effect is not trivial. On a package of AED 15,000 made up of AED 10,000 basic and AED 5,000 in housing and transport allowances, twenty unused leave days are worth AED 6,667 — not AED 10,000. Employees routinely expect the higher number. Employers, equally routinely, apply the basic-only rule to notice pay where it does not belong.

Gratuity

Twenty-one days of basic salary for each of the first five years of service, then thirty days of basic salary for each year beyond five. The total is capped at two years of basic salary however long you stayed. Less than one full year of continuous service means no entitlement at all; partial years beyond the first are counted proportionally.

Unused annual leave

Thirty calendar days accrue per year once you pass one year of service, and two days per month between six and twelve months. Below six months, nothing is due — though those months still count toward continuous service for gratuity.

Accrued leave is not forfeited by resigning. If an employer tells you otherwise, they are wrong.

Notice period

If you serve your notice, nothing extra is payable — you were being paid anyway. If your employer terminates without notice, they owe you your full-package wage for the notice period. If you leave without serving it, you owe them the same amount, and it comes out of your settlement.

Outstanding salary and other items

Any days worked but unpaid, calculated on full package. A repatriation air ticket where your contract provides one. Against these, an employer may deduct outstanding loans, salary advances, and unreturned company property.

The 14-day deadline

Employers must settle everything within fourteen days of your last working day. Not gratuity within fourteen days and the rest whenever — the whole settlement. If that passes without payment, MOHRE is the route.

One thing worth knowing: since 1 June 2026, private-sector salary payments including final settlements are required to flow through the Wages Protection System. A settlement paid in cash sits outside that record, which creates a compliance problem for the employer on top of whatever the underlying dispute is.

Before you sign anything

Ask HR for the settlement broken down line by line, showing which salary figure was used for each component. A settlement presented as a single number is impossible to check, and that is often the point.

Run your own figures first with the Final Settlement Calculator, which itemises all of it and labels the basis used for each line. If you only need the end-of-service portion, the Gratuity Calculator handles that alone. Unpaid overtime frequently surfaces at this point too — the Overtime Calculator covers the 125 and 150 per cent rates.

General information, not legal advice. DIFC and ADGM operate under separate employment legislation with different rules.

Step-by-Step Process

  1. 1
    Request an itemized settlement breakdown

    Showing which salary figure was used for each component.

  2. 2
    Verify basic-salary items

    Gratuity and unused leave — check against your contract's basic salary line.

  3. 3
    Verify full-package items

    Notice pay and outstanding salary.

  4. 4
    Escalate to MOHRE if unpaid past 14 days

Estimated Costs

ItemAmountNotes
Gratuity, years 1-5 21 days basic salary/year
Gratuity, year 6+ 30 days basic salary/year Capped at 2 years' basic salary
Unused leave accrual 30 days/year after 1yr; 2 days/month for 6-12mo Paid on basic salary only

Fees and thresholds change periodically — confirm current figures with the relevant authority before relying on them.

Frequently Asked Questions

How long does my employer have to pay my final settlement?

Fourteen days from your last working day, covering the entire settlement rather than gratuity alone. If that deadline passes without payment you can file a complaint with MOHRE.

Why is my leave encashment lower than I expected?

Because unused annual leave is paid on basic salary only under Article 29(9), excluding housing, transport and other allowances. Notice pay and outstanding salary, by contrast, use your full package.

Can my employer deduct things from my settlement?

Yes — outstanding loans, salary advances, unreturned company property, and pay in lieu of notice you did not serve. Deductions should be itemised rather than netted off into a single figure.

Do I lose anything by resigning rather than being terminated?

No. Since February 2022 both gratuity and accrued leave are payable identically whether you resign or are terminated, provided you have completed at least one year of continuous service.

Official Resources

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