Under the current UAE private-sector framework, resignation does not trigger the old one-third or two-thirds gratuity reductions. A qualifying foreign employee normally receives the standard formula after completing at least one year of continuous service, subject to unpaid absence, work pattern, special jurisdiction, deductions and any alternative savings scheme.
How much gratuity is payable after resignation?
Use the employee’s last monthly basic salary and adjusted service period. Divide basic salary by 30, apply 21 days for each of the first five years, and use 30 days for each year after the fifth. A partial year is proportional after one completed year.
What happened to the old resignation reductions?
Older articles often say that an employee on an unlimited contract receives one-third of gratuity after one to three years, two-thirds after three to five years, and the full amount after five years. Those fractions belonged to the former law. They should not be used as the default formula for a current 2026 resignation settlement.
Can leaving a fixed-term contract early cancel gratuity?
The current federal gratuity article does not create an automatic loss of gratuity merely because the employee resigns before a fixed-term contract expires. Notice obligations, contract terms, a lawful deduction or a separate jurisdiction may still affect the complete settlement, but they should be itemised rather than hidden inside an old gratuity reduction.
Notice period after resignation
Check the written notice period in the contract. If the employee does not serve the required notice and the employer does not waive it, compensation in lieu of notice may be claimed separately. Serving notice normally keeps the employment relationship running until the last working day used in the service calculation.
Resignation examples
| Basic salary | Eligible service | Gratuity days | Estimated gratuity |
|---|---|---|---|
| AED 5,000 | 2 years | 42 | AED 7,000 |
| AED 7,500 | 4.5 years | 94.5 | AED 23,625 |
| AED 8,000 | 7 years | 165 | AED 44,000 |
Before submitting a resignation
- Save the signed contract and any amendments.
- Confirm the official basic salary.
- Download leave and unpaid-absence records.
- Check the notice period and proposed last working day.
- Ask whether the employer uses an end-of-service savings scheme.
- Calculate an estimate and keep a copy.
If the employer uses the old fractions
Ask HR to identify the legal provision and service period used. Keep the calculation in writing. For a disagreement within MOHRE’s jurisdiction, use the ministry’s official guidance or complaint process. For DIFC, ADGM or another special jurisdiction, contact the relevant authority.
Official references
- UAE Labour Relations LawArticle 51 contains the current end-of-service formula.
- MOHRE worker-rights guidanceOfficial summary of current gratuity entitlement.