End of Service Calculator UAE
Calculate your end of service benefits as per UAE Labour Law
The Complete Guide to UAE End of Service Benefits (EOSB) 2026
When an employment contract concludes in the United Arab Emirates—whether through resignation, termination, or the natural completion of a fixed-term contract—the employee is legally entitled to a comprehensive final financial settlement known as End of Service Benefits (EOSB). This settlement is not just "gratuity"; it is a combination of multiple financial entitlements designed to protect the worker and ensure a smooth financial transition.
This authoritative 1,800+ word guide breaks down every single component of the UAE EOSB calculation under the updated Federal Decree Law No. 33 of 2021. From basic salary calculations and leave encashment to repatriation tickets and notice period compensation, we cover every legal requirement to ensure you receive your rightful final settlement.
1. What Exactly is Included in the EOSB Final Settlement?
Many employees mistakenly believe that "End of Service Benefits" simply refers to the gratuity payout. In reality, a complete final settlement in the UAE consists of up to five distinct components. Your employer is legally mandated to clear all these dues before cancelling your work visa.
Component A: End of Service Gratuity
The core component of the EOSB is the gratuity payout. This is a lump sum payment rewarded for continuous service. The calculation depends entirely on your basic salary, your type of contract, and the total duration of your employment. To dive strictly into the gratuity math, you can use our dedicated Gratuity Calculator.
Component B: Leave Salary (Encashment of Annual Leave)
Under UAE Labour Law, if you have accrued annual leave days that you have not taken by the time your employment ends, your employer must pay you for those days. This is known as leave encashment. Crucially, leave salary is calculated on your basic salary, though some specific contracts may stipulate gross salary depending on internal HR policies.
Component C: Notice Period Compensation
When either party terminates the employment contract, a notice period must be served (usually 30 to 90 days as per your contract). If the employer asks you to leave immediately without serving the notice period, they must pay you your full gross salary for those days. This is called "payment in lieu of notice." You can verify this using our Notice Period Calculator.
Component D: Unpaid Wages and Overtime
Any salary days worked in the final month, unpaid commissions, promised performance bonuses, or accrued overtime must be included in the final settlement. Overtime is highly regulated in the UAE, and you can calculate your exact dues with our Overtime Calculator.
Component E: Repatriation Ticket (Flight Back Home)
According to Article 13 of the UAE Labour Law, the employer is legally obligated to bear the cost of the employee's repatriation ticket to their home country (or the point of hire). However, there is a catch: if the employee resigns and immediately joins another company in the UAE, the new employer becomes responsible for future repatriation, and the old employer does not need to provide a flight ticket.
2. Step-by-Step Breakdown: Calculating the Gratuity Component
Because the gratuity is the largest chunk of the End of Service Benefits, it is vital to understand exactly how it is calculated. The formula is strictly tied to the basic salary. Your basic salary is explicitly defined in your MOHRE labour contract.
The Standard 21/30 Rule
- Years 1 to 5: You accrue 21 days of basic salary for each year of service.
- After 5 Years of Service: You are entitled to 30 days of basic salary for each additional year of service.
- Pro-Rata Calculation: You are entitled to gratuity for fractions of a year. If you work 3 years and 6 months, you get paid for the exact number of days worked.
Important Eligibility Rule: If you work for less than 12 continuous months, your gratuity entitlement is exactly zero. You must cross the 1-year mark to unlock the benefit.
3. The Impact of the 2026 Labour Law on EOSB
The UAE Federal Decree Law No. 33 of 2021, which came into full effect and matured over the last few years leading into 2026, brought monumental changes to the way EOSB is handled. Here are the most critical updates every employee must know:
The Abolition of Unlimited Contracts
Previously, employees were hired on either "limited" or "unlimited" contracts. If you resigned early on an unlimited contract, your gratuity was severely slashed (reduced by up to two-thirds). The new law mandated that all unlimited contracts be converted to fixed-term (limited) contracts. This effectively abolished the draconian resignation penalties. Under the modern fixed-term contracts, if you resign after completing 1 year, you are generally entitled to the full 21-day calculation without the 1/3 or 2/3 deductions.
The Strict 14-Day Payment Deadline
Under Article 53 of the new law, your employer must pay your entire final settlement—including gratuity, leave salary, and unpaid wages—within exactly 14 days from your contract end date. Delays are no longer tolerated by MOHRE, and employers face severe fines for withholding EOSB.
No Forfeiture for Resignation
In the past, resigning meant risking your benefits. Today, as long as you have completed one year of service and fulfill your notice period, your gratuity is protected by law.
Comparison Table: Resignation vs Termination Payout
To visually understand the difference between resigning and being terminated on a standard unlimited contract, refer to this comparison table based on years of service.
| Years of Service | Resignation — Entitlement | Termination — Entitlement | Formula Base |
|---|---|---|---|
| Less than 1 year | No gratuity | No gratuity | N/A |
| 1 – 3 years | 1/3 of 21 days/year | Full 21 days/year | Basic salary ÷ 30 |
| 3 – 5 years | 2/3 of 21 days/year | Full 21 days/year | Basic salary ÷ 30 |
| 5+ years | Full 30 days/year | Full 30 days/year | Basic salary ÷ 30 |
| Maximum cap | 2 years basic salary | 2 years basic salary | Article 132 |
4. Worked Calculation Examples: Getting Approved
To demonstrate how all these components come together, let us look at detailed, real-world examples of employees leaving a company.
Worked Example 1: Full Settlement with Notice Period
Scenario: David earns a total gross salary of AED 20,000 (AED 12,000 basic + AED 8,000 allowances). He resigns after exactly 4.5 years of service. He is serving his 30-day notice period and has 10 days of unused annual leave.
Step 1: Calculate Daily Basic Wage: AED 12,000 ÷ 30 = AED 400
Step 2: Calculate Gratuity (Component A): 4.5 years × 21 days = 94.5 days. 94.5 days × AED 400 = AED 37,800
Step 3: Calculate Leave Encashment (Component B): 10 days × AED 400 = AED 4,000
Step 4: Notice Period Pay (Component C): David works his final month, so he gets his regular gross salary. = AED 20,000
Step 5: Final Calculation: AED 37,800 + AED 4,000 + AED 20,000 = AED 61,800
Result: AED 61,800
Worked Example 2: Immediate Termination Settlement
Scenario: Aisha earns a total gross salary of AED 15,000 (AED 10,000 basic + AED 5,000 allowances). She is terminated without cause after 2 years. The employer asks her to leave immediately without serving her 30-day notice period. She has 0 days of unused leave.
Step 1: Calculate Daily Basic Wage: AED 10,000 ÷ 30 = AED 333.33
Step 2: Calculate Gratuity (Component A): 2 years × 21 days = 42 days. 42 days × AED 333.33 = AED 14,000
Step 3: Calculate Payment in Lieu of Notice: Because she cannot work the notice period, she receives the full gross salary for that month. = AED 15,000
Step 4: Final Calculation: AED 14,000 + AED 15,000 = AED 29,000
Result: AED 29,000
5. What Deductions Are Legal from Your Final Settlement?
It is very common for employers to deduct certain amounts from the final settlement. However, the UAE Labour Law strictly governs what is and isn't a legal deduction. If you see unauthorized deductions on your final settlement paper, do not sign it.
❌ ILLEGAL Deductions
- Visa processing costs
- Emirates ID application fees
- Medical fitness test costs
- Recruitment agency fees
- Basic training costs
✅ LEGAL Deductions
- Unpaid personal loans from the company
- Unsettled salary advances
- Cost of damaged company property (e.g., broken laptop)
- Negative leave balance (taking more leave than accrued)
6. The Voluntary Alternative EOSB Scheme (Savings Fund)
In late 2023, the UAE government introduced a groundbreaking new system: the Voluntary Alternative End-of-Service Benefits Scheme (often referred to as the Savings Scheme). This system allows employers to opt out of the traditional lump-sum gratuity payout and instead pay monthly contributions into an investment fund managed by licensed financial institutions.
- How it works: The employer contributes 5.83% of the basic salary monthly for employees with less than 5 years of service, and 8.33% for those with more than 5 years.
- The Benefit: The money is invested in low, medium, or high-risk portfolios chosen by the employee. When the employee leaves the company, they receive the accumulated fund value, which includes capital gains and dividends.
- Protection: This scheme protects employees from companies going bankrupt, ensuring the money is safely held by a third-party financial institution.
7. How to Claim Your EOSB if the Employer Refuses to Pay
If your employer delays your payment beyond the 14-day legal deadline, or if they present a final settlement document with incorrect math or illegal deductions, you must take immediate action. Do not sign the settlement document if you disagree with the numbers. Signing the cancellation paper effectively tells the government you have received all your dues.
The MOHRE Dispute Process:
- Step 1: Call the MOHRE toll-free number (800 60) or use the MOHRE smart app to file a formal "Salary Delay / EOSB" complaint.
- Step 2: A MOHRE legal researcher will contact both you and the employer to attempt amicable mediation over the phone.
- Step 3: If the employer still refuses to pay the correct amount, the ministry will issue a transfer letter to the Labour Court.
- Step 4: The Labour Court will review the contract and mandate the employer to pay. Cases involving clear mathematical entitlements (like gratuity and unpaid salary) are usually resolved quickly in favor of the employee.
Official Legal References
For verification of your rights, you should refer to the official government resources. The calculations provided in our tools are strictly aligned with these federal laws:
- Ministry of Human Resources and Emiratisation (MOHRE)
- Federal Decree Law No. 33 of 2021: Regulating Labour Relations in the UAE Private Sector.
- Cabinet Resolution No. 1 of 2022: Executive Regulations of the Labour Law.
Disclaimer: This is an estimate. Consult with your HR or legal advisor for exact calculations.