The Complete UAE End of Service Settlement Checklist
When concluding employment in the UAE mainland or free zones, an employee’s final settlement involves more than just their gratuity sum. Under Federal Decree-Law No. 33 of 2021, the settlement (often termed the Final Settlement & Discharge Slip) typically includes:
| Settlement Item | Legal Authority | Calculation Basis |
|---|---|---|
| Severance Gratuity | Article 51 | 21 days/yr for 1st 5 yrs, 30 days/yr thereafter (Basic Salary ÷ 30) |
| Unused Annual Leave | Article 29 | (Basic Salary ÷ 30) × Accrued Unused Leave Days |
| Final Month Wages | Article 22 | Pro-rata monthly salary for all calendar days worked up to last day |
| Repatriation Airfare | Article 13 | One-way flight to origin country (if leaving UAE and not transferring visa) |
Key Differences: Resignation vs. Termination
Under the old 1980 Labour Law, resigning voluntarily from an unlimited contract resulted in severe gratuity penalties (deductions of 1/3, 2/3, or complete forfeiture).
Under the 2021 Labour Law (Article 51):
- All employment contracts are standardized as fixed-term (limited) agreements.
- No resignation reductions apply once an employee has completed 1 full continuous year of service and served their contractual notice.
- If an employee resigns during their probationary period (up to 6 months), no gratuity is payable and 14–30 days written notice is required.
Deductions Permitted by Law
An employer may legally deduct certain amounts from the final end-of-service settlement under Article 25:
- Repayment of unearned loans or salary advances.
- Recovery of documented company property (laptops, vehicles, access cards) not returned.
- Court-ordered debt or maintenance payments.
- Important: Employers are strictly prohibited by UAE law from deducting recruitment fees, visa stamping charges, or work permit costs from an employee's gratuity.