MoHRE clarifies end-of-service gratuity: eligibility, calculations and 14-day payment rule
Eligibility and calculation basics
The Ministry of Human Resources and Emiratisation (MoHRE) has issued an awareness post detailing key provisions of the UAE Labour Law, including how gratuity is calculated, eligibility requirements and the deadlines employers must follow when settling employees’ financial entitlements.
Under the law, expatriate employees who complete at least one year of continuous service are entitled to end-of-service gratuity calculated on their last basic salary. For the first five years of service, employees receive the equivalent of 21 days’ basic salary for each year worked. For every additional year beyond the first five, the entitlement increases to 30 days’ basic salary.
The ministry clarified that employees who have completed at least one continuous year of service are also entitled to gratuity for any additional partial year, calculated proportionately according to the period worked. However, the total gratuity payable must not exceed the equivalent of two years’ wages, regardless of the employee’s length of service.
14-day payment deadline
MoHRE stressed that employers must pay all end-of-service entitlements and outstanding wages within 14 days from the date an employee’s contract ends. The requirement is intended to ensure that workers receive their financial entitlements promptly following the termination of their employment.
Voluntary Savings Scheme
The ministry also highlighted its voluntary Savings Scheme, which provides an alternative mechanism for managing and growing employees’ end-of-service benefits. Under the scheme, employers can participate in approved investment funds, allowing employees’ end-of-service benefits to be invested and potentially generate returns over time.
The ministry said the initiative provides an opportunity to strengthen employees’ financial security while supporting more sustainable management of end-of-service entitlements. The clarification forms part of MoHRE’s efforts to raise awareness of labour rights and obligations, helping employees understand their financial entitlements and employers comply with the UAE Labour Law.
