In the UAE, End of Service Benefits (EOSB) are a crucial part of employment regulations, ensuring financial security for employees upon leaving their jobs. Whether due to resignation, termination, or retirement, understanding EOSB is essential for both employers and employees to comply with UAE labor laws and avoid disputes.
End of service benefits in UAE are statutory payments due to an employee upon:
- Resignation
- Termination
- End of a fixed-term contract
As per UAE Labour Law (Federal Decree Law No. 33 of 2021), these benefits include:
- Gratuity (Severance Pay)
- Unused Leave Salary
- Notice Period Compensation (if applicable)
- Air Ticket (if agreed)
End of Service Benefits UAE 2025: HR Guide for Gratuity & Final Pay
Who Is Eligible for End of Service Benefits?
You are eligible for end of service benefits in UAE if:
- You are under a limited or unlimited contract
- You have completed at least 1 year of continuous service
- You are not terminated for gross misconduct
How to Calculate Gratuity in 2025 (UAE)
Gratuity is calculated based on:
- Basic Salary (excluding allowances)
- Years of Service
Gratuity Formula:
| Years of Service | Calculation Rule |
|---|---|
| 1–5 years | 21 days’ basic salary per year |
| 5+ years | 30 days’ basic salary per year |
Maximum gratuity must not exceed 2 years’ total salary.
Example:
If an employee has:
- Basic salary = AED 5,000
- Service = 6 years
Gratuity = (21 days × 5,000 / 30) × 5 + (30 days × 5,000 / 30) × 1 = AED 27,500
What About Notice Period Pay?
If:
- The employer terminates without proper notice, they must pay salary in lieu
- Employees who leave without notice may forfeit part of benefits
Minimum notice period: 30 days (unless otherwise stated)
Leave Salary Calculation
Employees are entitled to:
- Payment for unused annual leave
- Based on basic salary only
Example:
- 10 days unused leave
- Basic salary = AED 4,500
- Leave salary = (4,500 / 30) × 10 = AED 1,500
Return Ticket Policy
Some contracts require the employer to pay:
- One-way air ticket to employee’s home country
- Especially if the employee exits UAE permanently
Check the employment contract for clause.
Final Settlement Timeline
| Action | Deadline (Days) |
| Pay all dues after last working day | 14 calendar days |
Failure to comply may result in:
- Labour complaint
- Legal penalties
Free Zone vs MOHRE Gratuity Rules
All zones follow Federal Law, but:
- Free Zones may process claims through their internal portal
- MOHRE handles all mainland disputes via mohre.gov.ae
Gratuity in Case of Resignation Before 1 Year
Employees resigning before completing 1 year of service are not entitled to gratuity.
For 1–5 years: Full gratuity based on 21 days per year
For 5+ years: Full gratuity including 30 days/year for time beyond 5 years
Can Employer Deduct from Gratuity?
Yes, deductions can apply for:
- Loans or advances
- Damaged property
- Unpaid leaves
- Unreturned company assets
All deductions must be justified and documented.
Required Documents for Final Settlement
- Emirates ID copy
- Passport copy
- Resignation or termination letter
- Labour contract
- Company clearance forms
Mahad HRC Can Help
At Mahad HRC, we help UAE employers:
- Calculate accurate gratuity and leave pay
- Prepare compliant final settlement forms
- Submit end-of-service records to MOHRE or Free Zones
- Prevent disputes with accurate documentation
Contact MahadHRC.ae for expert HR and legal compliance support.
Conclusion:
Understanding end of service benefits UAE in 2025 is essential for both employers and employees. Follow the right steps and legal framework to ensure fair, accurate settlements.