For years, employees in the UAE were told that resigning would cost them part of their gratuity. That was true under the old Labour Law. It is not true under the current one.
What the old law said
Under Federal Law No. 8 of 1980, an employee on an unlimited contract who resigned received a reduced share of gratuity:
| Service when resigning | Gratuity received (old law) |
|---|---|
| 1 to 3 years | One third |
| 3 to 5 years | Two thirds |
| More than 5 years | Full |
There were also rules under which some employees on limited contracts who resigned early could lose gratuity entirely.
What the current law says
Federal Decree-Law No. 33 of 2021, in force since 2 February 2022, replaced the old law. Article 51 sets one formula, and it does not reduce gratuity when the employee resigns. If you have completed at least one year of continuous service and resign, you receive the full amount:
- 21 days’ basic wage for each of the first five years
- 30 days’ basic wage for each year after that
- capped at two years’ wage
Work out your figure with the UAE gratuity calculator.
What still matters when you resign
Serve your notice period. Your contract sets the notice period, within the limits of the law (generally between 30 and 90 days). Leaving without serving it can mean you owe your employer compensation for the notice period, which may be deducted from your dues.
Check for deductions. Your employer can deduct amounts you genuinely owe, such as an outstanding loan or advance, but not arbitrary amounts.
Get it in writing. Submit your resignation in writing and keep a copy with the date.
Know the payment deadline. All dues must be paid within 14 days of your last day. See final settlement timing.
Exceptions
The full-gratuity rule applies to private-sector employees on the UAE mainland. It does not apply in the same way to:
- DIFC and ADGM employees, who have their own employment laws
- UAE nationals, who are covered by pension
- employees whose employer has moved them into the end-of-service savings scheme. See the savings scheme explained.
If your employer says otherwise
If an employer applies the old reductions, ask in writing which legal provision they rely on. If the issue is not resolved, you can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE).
Before and after: one example
An employee on an unlimited contract with a basic salary of AED 9,000 resigns after four years.
| Old law (until February 2022) | Current law | |
|---|---|---|
| Full gratuity | 4 × 21 × 300 = AED 25,200 | AED 25,200 |
| Share on resignation | Two thirds | Full |
| Gratuity received | AED 16,800 | AED 25,200 |
Frequently asked questions
Does the change apply to service before 2022?
The current law applies to the calculation at the end of employment. If your employer applies old-law reductions to earlier years, ask for the legal basis in writing.
What if I resign during probation?
No gratuity is due before one year of service. Resigning during probation also has its own notice rules under the law.
What if I am dismissed for misconduct?
In some cases of serious misconduct, the employer may dismiss without notice. Ask for the reason in writing and check your rights with MOHRE.
