Frequently asked questions

Yes. Under Federal Decree-Law No. 33 of 2021, gratuity is owed to any employee who completes at least one year of continuous service, regardless of whether they resign or are terminated. Earlier UAE law reduced gratuity for employees who resigned before five years on an unlimited contract, but that distinction no longer applies under the current law.

Yes, as long as you successfully complete probation and continue working for the same employer, your probation period counts from your original joining date. Gratuity itself only starts accruing once you pass one full year of total service.

The UAE does not levy personal income tax, so gratuity payments are not taxed when paid to you in the UAE. If you are a tax resident of another country, that country's tax rules may still apply to money you bring home, so it is worth checking with a tax advisor there.

Most UAE free zones follow the same federal gratuity formula. However, DIFC and ADGM have their own distinct employment regulations with different end-of-service benefit structures, so employees there should check their specific free zone's rules rather than the federal law.

Yes. Since 2022, all new UAE employment contracts are fixed-term (limited) contracts, and gratuity applies equally as long as you complete at least one year of service, whether the contract ends naturally, you resign, or you are terminated without cause.

If an employer terminates you for one of the specific serious misconduct reasons listed in Article 44 of the labour law (such as proven fraud or a serious breach of safety rules), gratuity can be forfeited. For ordinary terminations without cause, gratuity is still owed.

Gratuity is calculated using your basic salary only, excluding housing, transport, and other allowances. Notice pay and unused leave salary, by contrast, are usually calculated on your full salary including allowances.

Any annual leave days you have accrued but not taken are paid out at the end of your employment, calculated as your daily wage (total salary divided by 30) multiplied by the number of unused leave days.

Notice periods are set by your employment contract and typically range from 30 to 90 days. If either party ends the contract without the other side working through the full notice period, the shortfall is paid as notice pay.

Employers can generally deduct amounts you owe them, such as unpaid loans, advances, or damage the employee is proven responsible for, but cannot arbitrarily reduce your gratuity below what the law formula entitles you to.