Final Settlement in the UAE: What's Due Within 14 Days of an Exit

When someone leaves a UAE mainland employer, everything they're owed has to be paid within 14 days of the end of the contract, through WPS (UAE Government portal): salary up to the final day, end-of-service gratuity (if they served at least a year), pay for unused annual leave, and any notice pay or compensation the exit triggers. The employee signs off on the final figure, and only then does the government paperwork — cancelling the work permit with MoHRE and then the residence visa — close the file. Fourteen days is tight when the calculation still lives in a spreadsheet; it's comfortable when the numbers already exist the day the resignation arrives.

What goes into a UAE final settlement?

Five components, and not every exit triggers all of them:

1. Salary to the last working day. Including any allowances and overtime earned in the final period.
2. End-of-service gratuity. 21 days of basic salary per year for the first five years, 30 days per year after that, capped at 24 months, payable after one full year of service (partial years pro-rata), as set out on the UAE Government portal. The full formula is in EOS & Gratuity in the UAE, Explained.
3. Unused annual leave. Accrued days not taken are paid out, on basic salary.
4. Notice. Contracts set a notice period of 30–90 days. If either side doesn't serve it, the other is owed pay in lieu for the unserved part, at the last salary.
5. Compensation for arbitrary dismissal. If a court finds the dismissal arbitrary (Article 47), compensation of up to three months' salary comes on top of gratuity — it doesn't replace it.

Anything you deduct — an outstanding salary advance, for example — should appear as its own line, so the employee can see exactly how the final figure was reached.

Does the reason for leaving change the amount?

Less than most employers assume. Under Federal Decree-Law No. 33 of 2021:

• Resignation doesn't reduce gratuity. The old one-third / two-thirds reduction scale disappeared with the 1980 law; an employee who resigns after a year gets the same formula as one whose contract ended.
• Dismissal for misconduct under Article 44 — including more than 20 non-consecutive days of unexcused absence in a year, or more than 7 in a row — ends the contract without notice, but the employee keeps their gratuity. It can only be forfeited by a separate court ruling.
• Leaving without notice because of the employer's breach (Article 45) keeps all of the employee's rights.
• Arbitrary dismissal (Article 47) adds up to three months' compensation on top.

The reason still matters — for the notice line, for compensation and for the audit trail — but in most cases it doesn't shrink the gratuity.

A worked example

An employee on AED 8,000 basic (AED 12,000 total salary) resigns after 3 years and 4 months, serves the full notice, and has 10 unused leave days.

• Daily basic rate: 8,000 ÷ 30 = AED 266.67
• Gratuity: 21 days × 266.67 × 3.33 years = AED 18,666.67
• Unused leave: 10 × 266.67 = AED 2,666.67
• Final month's salary (full month worked): AED 12,000
• Total due within 14 days: AED 33,333.34

Two common mistakes would change that number: calculating gratuity on the AED 12,000 total instead of the AED 8,000 basic (overpaying by AED 9,333), or applying the old resignation reduction (at 3–5 years of service the old scale paid only two-thirds — underpaying by a third, about AED 6,222).

What about exits during probation?

Probation (up to six months, Article 9) has its own notice rules, and gratuity isn't due before a year of service:

• The employer ends it: at least 14 days' written notice.
• The employee moves to another UAE employer: at least one month's notice — and the new employer compensates the old one for recruitment costs unless agreed otherwise.
• The employee leaves the country: at least 14 days' notice.

Whichever side skips the notice owes pay for the remaining period.

What has to happen after the money is paid?

The settlement isn't finished when WPS confirms the transfer:

1. The employee signs the final settlement form, confirming receipt of all dues.
2. The work permit and contract are cancelled with MoHRE — delays here are fined.
3. Then the residence visa is cancelled with ICP/GDRFA — in that order, not the other way round.
4. The employee comes off the WPS payroll, and for UAE and GCC nationals, GPSSA is notified of the end of service.

If an employee dies in service, salary, dues and the full gratuity go to the family, and the employer covers repatriation if the family asks.

Why is 14 days hard in practice?

Because the calculation usually starts from zero on the day of the resignation: someone finds the contract, checks the basic salary, counts unpaid-leave days to subtract from service, recounts the leave balance, and then waits for the next monthly payroll to pay it. The last step is the one that breaks the deadline. When the settlement is calculated from data already in the system, approved, and paid as an off-cycle run with its own WPS file, 14 days stops being a scramble.

For the rest of UAE payroll compliance, see HR & Payroll Compliance in the UAE — Complete 2026 Guide.

Sources

The rules in this article are quoted from official UAE government sources and may change; always confirm the current requirements with MOHRE:

• UAE Government portal (u.ae) — End of service benefits for workers in the private sector
• Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (UAE Legislation portal)