UAE final settlement explained: what you're owed when you leave

By Zulu Calculator · Updated 19 October 2026 · Gulf jobs

When a private-sector job in the UAE ends, your employer owes you a final settlement: salary for the days you worked in your last month, your end-of-service gratuity, pay for unused annual leave, notice pay if you were not given your full notice, and any other dues, minus loans or advances you owe. It must be paid within 14 days of the contract ending. On a basic salary of AED 10,000 and a total salary of AED 15,000, someone leaving on 31 March 2025 after 6 years and 3 months, with 10 days of unused leave, is owed AED 65,833.33.

This guide goes through each part, which salary each one is paid on, and what to do if the money is late or wrong. To work out your own figure, use the UAE final settlement calculator.

What is included in a final settlement in the UAE?

Under Federal Decree-Law No. 33 of 2021 (the UAE Labour Law), a final settlement on the mainland usually has these parts:

• Salary still owed for the days you worked in your last month.
• End-of-service gratuity (Article 51), once you have one year of service.
• Unused annual leave, paid in cash (Article 29(9)).
• Notice pay, when your employer ends the contract without giving you the full notice.
• Other dues, such as unpaid overtime, a bonus or commission, or an air ticket allowance in your contract.
• Minus money you owe, such as loans, salary advances, or pay for notice you did not serve after resigning.

The DIFC, ADGM and government jobs have their own rules. This guide covers the mainland private sector.

How is the final settlement calculated?

Each part has its own daily rate. Some use your total salary (basic plus fixed allowances such as housing and transport), and some use your basic salary only.

salary owed = total salary ÷ 30 × days worked in the last month
gratuity = basic ÷ 30 × (21 × first 5 years + 30 × years after), at most 24 × basic
unused leave = basic ÷ 30 × unused days
notice pay = total salary ÷ 30 × notice days not given
final settlement = salary owed + gratuity + unused leave + notice pay + overtime + other dues − money you owe

Dividing by 30 is the usual practice. The law counts a month as 30 days (Article 67) but does not set a daily-rate formula.

Which salary each part is paid on

How is gratuity worked out?

Gratuity is usually the biggest part. In short: 21 days of basic wage for each of the first five years, 30 days for each year after, part years paid in proportion, and never more than two years of basic wage. You need at least one year of continuous service, and unpaid leave days do not count. Resigning no longer reduces it: the 2021 law, in force since February 2022, removed the old cut. For the full rules, the cap, part-time service and the DIFC, read UAE gratuity rules explained or use the UAE gratuity calculator.

Is unused leave paid on basic or total salary?

On basic salary. Article 29(9) says unused leave paid when the job ends is worked out on the basic wage. Leave you take while still employed is paid differently: during annual leave you get your full wage, which includes allowances such as housing (Articles 1 and 29). So the same day of leave is worth less when it is cashed in at the end.

How much leave you build up:

• 30 calendar days of paid leave for each year of service, with part years in proportion.
• 2 days for each completed month once you have worked more than 6 months but less than a year.
• No annual leave before 6 months of service.
• Part-time workers get leave in proportion to their hours.
• Unpaid leave does not count towards your service (Article 33).

Take away the days you have already used to get your unused balance. Leave can be carried into the next year only if your employer agrees, so your company's leave policy matters. The UAE leave salary calculator works out how many days you have earned and what they are worth.

How does notice pay work?

Notice is 30 to 90 days, as your contract says. Notice pay uses your total salary ÷ 30 for each day of notice that was not given or served. Who pays depends on who ended the contract:

This is how most contracts apply it. Special cases, such as dismissal for misconduct or leaving during probation, follow their own rules, so check your contract and the MOHRE rules for your case. If you work your full notice, there is no notice pay either way: you are simply paid salary for those days.

How is the last month's salary counted?

You are owed salary for the days you worked in your last month that have not been paid yet, at total salary ÷ 30 a day. If your last working day is the 15th, that is 15 days. If your last working day is the last day of its month, it counts as a full month of 30 days, because the daily rate is monthly salary ÷ 30. If you joined in that same month, only the days from joining count. If your last month has already been paid through payroll, this part is zero.

Worked examples

Example 1: 6 years and 3 months, resigned with full notice

You worked from 1 January 2019 to 31 March 2025, which is 6 years and 3 months, or 6.25 years. Your basic salary is AED 10,000 and your total salary AED 15,000. You have 10 days of unused leave and you worked your full 30 days' notice.

• Salary owed: 31 March is the last day of the month, so a full month: 15,000 ÷ 30 × 30 = AED 15,000.00
• Gratuity: 5 × 21 + 1.25 × 30 = 142.5 days, and 142.5 × 10,000 ÷ 30 = AED 47,500.00
• Unused leave: 10 × 10,000 ÷ 30 = AED 3,333.33
• Final settlement: 15,000 + 47,500 + 3,333.33 = AED 65,833.33

Example 2: the same job, but notice cut short

Same dates and salary, but only 10 of the 30 days' notice were given or served. The 20 missing days are worth 20 × 15,000 ÷ 30 = AED 10,000.00.

• If your employer ended the contract: 65,833.33 + 10,000 = AED 75,833.33
• If you resigned and left early: 65,833.33 − 10,000 = AED 55,833.33

The gratuity is AED 47,500.00 in both cases. Only the notice changes.

Example 3: mid-month exit with overtime and a loan

You worked from 1 June 2022 to 15 September 2025, which is 3 years, 3 months and 15 days, or 3.291 years. Your basic salary is AED 8,000 and your total salary AED 12,000. You have 18 days of unused leave, 10 hours of overtime that were never paid, and a AED 5,000 loan from your employer still to repay. You served your full notice.

• Salary owed: 15 days × 12,000 ÷ 30 = 15 × 400 = AED 6,000.00
• Gratuity: all within the first five years, so 8,000 ÷ 30 × 21 = AED 5,600 a year, and 5,600 × (3 + 3 ÷ 12 + 15 ÷ 365) = AED 18,430.14
• Unused leave: 18 × 8,000 ÷ 30 = AED 4,800.00
• Overtime: hourly basic wage 8,000 × 12 ÷ 365 ÷ 8 = AED 32.877, and 32.877 × 1.25 × 10 hours = AED 410.96
• Owed to you: 6,000 + 18,430.14 + 4,800 + 410.96 = AED 29,641.10
• Minus the loan: 29,641.10 − 5,000 = AED 24,641.10

The overtime rate comes from Article 19: the basic hourly wage plus at least 25%, or plus at least 50% between 10 pm and 4 am. Rest-day hours earn a substitute rest day or basic pay plus at least 50%. The hourly wage formula (basic × 12 ÷ 365 ÷ daily hours) is common practice, not written in the law.

Example 4: under one year

You worked from 1 January 2025 to 20 October 2025, which is 9 months and 20 days, on AED 6,000 basic and AED 9,000 total. Your employer ended the contract and gave you the full 30 days' notice. You earned 9 × 2 = 18 days of leave and have 16 left.

• Gratuity: under one year, so AED 0
• Salary owed: 20 × 9,000 ÷ 30 = 20 × 300 = AED 6,000.00
• Unused leave: 16 × 6,000 ÷ 30 = 16 × 200 = AED 3,200.00
• Final settlement: 6,000 + 3,200 = AED 9,200.00

What can be deducted?

Your employer may take off amounts you owe it, such as loans or salary advances. If you resigned and did not serve all your notice, pay for the missing days can also be taken off. If the money you owe is more than what you are owed, the settlement is zero and you would still owe the difference. Ask for every deduction to be shown on the settlement statement with the reason.

When must the final settlement be paid?

Your employer must pay everything owed, including gratuity, unused leave and any notice pay, within 14 days of the contract ending.

What if my settlement is late or wrong?

1. Ask for the full calculation in writing. It should show your dates, basic and total salary, unused leave days, notice days and every deduction.
2. Check it part by part. The usual errors are below. Compare with your contract and payslips.
3. Talk to HR and show your own working, for example a share link from the calculator.
4. Contact MOHRE. If it is not paid within 14 days, or you cannot agree, you can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE). Keep copies of your contract, payslips, leave records and messages.

Common mistakes

• Paying unused leave on total salary. It is paid on basic. Leave taken during the job is paid on full wage, but cashed-in leave at the end is not.
• Paying gratuity on total salary. Gratuity also uses basic only, unless your contract gives more.
• Forgetting the last month's salary. Days worked in the final month are owed on top of everything else.
• Cutting gratuity for resigning. That rule was removed in February 2022.
• Mixing up who pays for notice. Notice not given by the employer is usually added; notice not served by you can usually be taken off. Check your contract.
• Using 26 or 22 working days. The usual daily rate is monthly salary ÷ 30.
• Missing unpaid overtime, a bonus or a ticket your contract promises.

What about unemployment insurance?

The Involuntary Loss of Employment (ILOE) scheme is separate from your settlement and is paid by the scheme, not your employer. If you lost your job for a reason other than resigning, were not dismissed for disciplinary reasons, and had been subscribed for at least 12 months in a row with all premiums paid, you can claim 60% of your salary for up to 3 months, capped at AED 10,000 a month if your basic salary is AED 16,000 or less (Category A), or AED 20,000 above that (Category B). You must claim within 30 days of the job ending. The UAE unemployment insurance calculator works out what you would get.

Quick summary

• Salary owed and notice pay: total salary ÷ 30 a day.
• Gratuity and unused leave: basic salary ÷ 30 a day.
• Gratuity: 21 days a year for 5 years, then 30, capped at 24 months of basic; nothing under one year.
• Notice is 30 to 90 days; the side that cuts it short usually pays for the missing days (check your contract).
• Loans and advances you owe can be taken off.
• Everything is due within 14 days of the contract ending; complain to MOHRE if it is not paid.

For the gratuity part in detail, see UAE gratuity rules explained. Check single parts with the UAE gratuity calculator, the UAE leave salary calculator and the UAE overtime calculator. Working in Qatar instead? See how Qatar gratuity is calculated.

Rules checked against Federal Decree-Law No. 33 of 2021 (Articles 1, 19, 29, 33, 51 and 67), Cabinet Resolution No. 1 of 2022 and the u.ae ILOE page, as used by our calculators (checked 9–18 October 2026).

This guide explains the rules in plain English for planning. It is not legal, financial or flight-operations advice; check your contract, the official source linked above, your employer or your operator.