What is a final settlement in the UAE?
A final settlement is the last payment you receive from your employer when your contract ends. In the UAE it is often called "final settlement", "full and final settlement" or simply "FnF". It brings together every amount the employer still owes you, and it subtracts anything you still owe the employer.
Many workers think the final settlement is the same as gratuity. It is not. Gratuity is only one part. You may also be owed salary for days you worked in your last month, money for leave days you never took, pay for the notice period, and other amounts promised in your contract. For some people these other items are worth more than the gratuity.
This calculator puts all of these pieces together, so you can check the figure HR gives you. If you only want the gratuity part, use our UAE Gratuity Calculator.
What is included in a UAE final settlement?
The exact items depend on your contract and how your job ended. A typical private sector settlement on the mainland includes:
- End of service gratuity. 21 days of basic wage per year for the first five years and 30 days per year after that, once you have at least one year of service. Capped at two years of wages.
- Unpaid salary. Pay for the days you worked in your last month that have not yet been paid. This uses your normal total wage.
- Leave encashment. Cash for annual leave you earned but did not use. The law bases this on your basic wage.
- Notice pay in lieu. If your employer ended the contract without giving you the full notice, it must pay your wage for the notice days not given.
- Other dues. For example, unpaid overtime, a contractual bonus, commission, or a return ticket home if your contract or the law gives you one.
- Minus deductions. Amounts you lawfully owe the employer, such as a salary advance, a personal loan from the company, or notice pay you owe because you left early.
The legal basis
The rules come from Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relations, which started on 2 February 2022. Its Executive Regulations are in Cabinet Resolution No. 1 of 2022. The main articles for final settlement are:
| Item | Where it comes from | Salary used |
|---|---|---|
| Gratuity | Article 51 | Last basic wage |
| Unused annual leave | Article 29; Article 19 of Cabinet Resolution 1/2022 | Basic wage |
| Notice pay in lieu | Article 43 | Full wage |
| Return ticket | Article 13 | Not salary based |
| Payment deadline | Article 53 | 14 days from contract end |
Article 53 is especially important. It says the employer must pay the worker's wages and all end of service dues within 14 days from the date the contract ends. This is the deadline your employer must meet.
Article 29 gives you 30 days of annual leave for each year of service, and 2 days per month if you have worked more than six months but less than a year. It also says that if you leave before using your leave, you must be paid for the unused days, including a pro-rata share for the last part year. That payment is calculated on the basic wage.
Article 43 sets a notice period of between 30 and 90 days. If one party does not give notice, it must pay the other an amount equal to the worker's wage for the whole notice period or the part not given. Gulf News and several UAE lawyers read "wage" here as the full wage, including allowances, and our calculator follows that view.
In August 2024, Federal Decree-Law No. 9 of 2024 changed some rules about labour disputes. It extended the time to file a claim to two years and let MOHRE decide smaller disputes directly. The settlement formula itself did not change.
How to calculate final settlement in UAE: step by step
Every part uses a daily rate of monthly salary divided by 30. The calculator does this for you, but here is the method so you can check it.
1. Gratuity
Gratuity = Daily basic × 21 × (years up to 5) + Daily basic × 30 × (years above 5)
No gratuity if service < 1 year · Maximum = Basic × 24
2. Unpaid salary for days worked
3. Leave encashment
To estimate your unused leave, add up what you earned (2.5 days per month of a full year, or 30 days per year) and subtract what you took. Our UAE Leave Salary Calculator can help with this.
4. Notice pay in lieu
If the employer cut your notice short, this amount is added. If you left without serving your notice, it is subtracted.
5. Put it together
Worked examples
These examples use the same rules as the calculator. Enter the same figures above and you will get the same results.
Example 1: Resigning after five years with a company loan
Anil worked in a Dubai logistics company from 1 July 2021 to 30 June 2026. His basic salary is AED 6,000 and his total salary is AED 10,000. He worked 20 days in June that were not yet paid. He has 12 days of unused leave. He served his full notice. He still owes AED 2,000 from a company loan.
| Gratuity (5 years × 21 days × AED 200) | AED 21,000.00 |
| Unpaid salary (AED 10,000 ÷ 30 × 20) | AED 6,666.67 |
| Leave encashment (AED 6,000 ÷ 30 × 12) | AED 2,400.00 |
| Notice pay | AED 0.00 |
| Loan deduction | − AED 2,000.00 |
| Net final settlement | AED 28,066.67 |
|---|
Note that Anil resigned and still gets his full gratuity. The current law does not cut gratuity for resignation.
Example 2: Terminated without notice
Fatima worked as an accountant from 1 February 2023 to 31 January 2026, exactly three years. Her basic salary is AED 4,500 and her total salary is AED 7,500. Her employer ended her contract with immediate effect, without the 30 days' notice in her contract. Her January salary was not paid. She has 8 unused leave days. Her contract gives her a ticket allowance of AED 1,000.
| Gratuity (3 × 21 × AED 150) | AED 9,450.00 |
| Unpaid salary (30 days × AED 250) | AED 7,500.00 |
| Leave encashment (8 × AED 150) | AED 1,200.00 |
| Notice pay in lieu (30 × AED 250) | AED 7,500.00 |
| Other dues (ticket) | AED 1,000.00 |
| Net final settlement | AED 26,650.00 |
|---|
The notice pay alone is worth almost as much as her gratuity. This is why it matters to check every line.
Example 3: Leaving early, less than one year of service
Rodel joined a retail shop on 1 September 2025 and left on 31 May 2026, after nine months. His basic salary is AED 3,000 and his total salary is AED 5,000. He worked 10 days in May that were unpaid and has 6 days of unused leave. He left 15 days before his notice ended, and he owes a salary advance of AED 500.
| Gratuity (less than 1 year) | AED 0.00 |
| Unpaid salary (10 × AED 166.67) | AED 1,666.67 |
| Leave encashment (6 × AED 100) | AED 600.00 |
| Notice he owes (15 × AED 166.67) | − AED 2,500.00 |
| Salary advance | − AED 500.00 |
| Net result | − AED 733.33 |
|---|
Here the result is negative. On paper, Rodel owes his employer AED 733.33. In real life, many employers simply pay zero and close the file, but some may ask for the balance. The lesson is clear: leaving without serving notice can wipe out your settlement. Use our UAE Notice Period Calculator to plan your last day before you resign.
Basic or total salary? A quick table
The most common source of confusion is which salary to use for each item. Here is a simple summary.
| Item | Basic salary | Total salary |
|---|---|---|
| Gratuity | Yes | No |
| Unused leave paid at end of service | Yes | No |
| Salary for days worked | No | Yes |
| Notice pay in lieu | No | Yes |
| Leave salary while you are on leave | No | Yes (basic + housing) |
Your contract can always give you more than the law. If your contract says leave is encashed on total salary, your employer should follow the contract.
Special cases
Resignation vs termination
Under the current law, your settlement is mostly the same whether you resign or are terminated. You keep your gratuity (after one year), your unpaid salary and your unused leave. The main difference is the notice period. If you resign, you must serve your notice or pay for the days you skip. If the employer terminates you, it must give notice or pay you for it.
Dismissal under Article 44
Article 44 lists serious reasons that allow an employer to dismiss a worker without notice, such as fraud, serious safety breaches or long unexplained absence. In these cases no notice pay is due. You are still owed salary for days worked and your unused leave. The treatment of gratuity can depend on the facts, so take advice from MOHRE if you are dismissed under this article.
Return ticket
Article 13 requires employers to cover the worker's return trip home at the end of service in many cases. Gulf News reports that this is usually not owed if you join another UAE employer or stay in the country. Annual tickets are not required by law; they only apply if your contract offers them. Add any ticket amount you are owed in the "Other dues" box.
Leave carried forward
Article 19 of Cabinet Resolution No. 1 of 2022 lets you carry forward up to half of your yearly leave, unless you agree with your employer to be paid for it instead. At the end of service, all legally due leave that you have not taken must be paid on the basic wage.
Garden leave
Some employers ask you to stay at home during your notice period. This is often called garden leave. You are still employed during this time, so you should receive your full salary for those days. Your final settlement is then calculated with your last working date at the end of the notice period, not the day you stopped going to the office.
Death of a worker
If a worker dies while still employed, the contract ends on that date. The gratuity, unpaid salary, leave balance and other dues are then paid to the family or legal heirs. The employer usually asks for official documents before releasing the money, so the family should contact HR early and keep copies of everything they submit.
Part-time workers
If you work part-time, your gratuity is reduced in proportion to your hours, as set out in Article 30 of Cabinet Resolution No. 1 of 2022. Salary and leave are paid according to your part-time contract.
Free zones, DIFC and ADGM
Most free zones follow the federal law. DIFC and ADGM have their own employment laws. In the DIFC, gratuity was replaced by the DEWS savings plan in 2020, so your end of service money comes from that fund. If your employer joined the newer voluntary federal savings scheme under Cabinet Resolution No. 96 of 2023, your fund balance replaces gratuity for the enrolled period.
Domestic workers
Domestic workers are covered by Federal Decree-Law No. 9 of 2022, not by the labour law used here. Their rights to salary, leave and end of service are different. Check with MOHRE.
Common mistakes to avoid
- Treating gratuity as the whole settlement. Salary days, leave and notice pay are separate items.
- Using the wrong salary. Gratuity and leave encashment use basic salary. Unpaid salary and notice pay use your total wage.
- Forgetting leave earned in the final year. Unused leave for the last part year must be paid pro-rata.
- Leaving before notice ends. The days you skip can be deducted from your settlement.
- Accepting unexplained deductions. Ask for a written breakdown of every deduction.
- Signing too early. Do not sign that you have "received all dues" until the money is in your account.
- Cancelling your visa before payment. Try to agree the payment date first. It is easier to deal with problems while you are still in the country.
If your final settlement is late or wrong
The legal deadline is 14 days from the end of your contract. If the money has not arrived, or the amount looks wrong, take these steps:
- Request a written breakdown. Ask HR to email you the settlement statement with each item and each deduction.
- Compare it with this calculator. Note any item that is missing or lower than expected.
- Raise it with your employer in writing. Many errors are fixed at this stage.
- File a complaint with MOHRE. Use the MOHRE app, the MOHRE website or the MOHRE call centre. Have your Emirates ID or labour card number, your contract and your payslips ready.
- Mediation and decision. MOHRE first tries to settle the dispute. Under the 2024 amendment, MOHRE can issue a binding decision on claims up to AED 50,000. Larger claims, or cases that are not settled, go to the labour court. Workers are exempt from court fees on claims below AED 100,000.
Remember the two-year time limit for labour claims. Acting quickly also makes it easier to collect evidence.
Tips before your last day
- Ask HR for your leave balance in writing at least a month before you leave.
- Decide with your employer whether you will take your remaining leave or be paid for it.
- Return company property such as laptops, SIM cards and cars, and get a signed handover note. This avoids surprise deductions.
- Keep copies of your contract, offer letter, salary change letters and payslips.
- Check whether you are owed overtime. Our UAE Overtime Calculator shows how much.
- Find out whether your employer enrolled you in the voluntary savings scheme. If yes, ask for your fund statement.
Frequently asked questions
What is included in a UAE final settlement?
Usually your end of service gratuity, salary for the days you worked in the last month, payment for unused annual leave, notice pay if notice was not served, and any other dues in your contract. Lawful deductions such as loans or advances are then subtracted.
How many days does my employer have to pay my final settlement?
Article 53 of Federal Decree-Law No. 33 of 2021 says the employer must pay wages and all end of service dues within 14 days of the end of the contract.
Is leave encashment based on basic or gross salary?
For unused leave paid at the end of service, the law uses the basic wage. Article 29 of the Labour Law and Article 19 of Cabinet Resolution No. 1 of 2022 both point to the basic wage for this payment.
Is my last month salary paid on basic or full salary?
Salary for days worked is paid at your full monthly wage, including your normal allowances, because you earned it as normal pay. Only gratuity and leave encashment use the basic wage.
Do I get a final settlement if I resign?
Yes. Resigning does not remove your right to unpaid salary, leave encashment or gratuity (if you have one year of service or more). You must serve or pay for your notice period.
Can my employer deduct a loan from my final settlement?
Yes, an employer can recover a loan or salary advance that you owe it, within the limits of the law. It should show every deduction on your settlement statement.
What if I did not serve my notice period?
The party that did not give the required notice must pay the other side compensation equal to the wage for the notice period or the part not served. If you left early, this amount may be deducted from your settlement.
Should I sign the settlement form before I receive the money?
It is safer not to. Signing a paper that says you received all dues can make a later claim harder. Ask for the payment first, or write that you have not yet received it.
Where do I complain if my final settlement is not paid?
File a labour complaint with the Ministry of Human Resources and Emiratisation (MOHRE) through its app, website or call centre. MOHRE will try mediation first and can refer the case to court.
How long do I have to make a claim?
Since Federal Decree-Law No. 9 of 2024, labour claims must be filed within two years from the end of the employment relationship.
Disclaimer
This calculator and article give an estimate for general guidance only. They are not legal advice. Your contract, company policy or a MOHRE or court decision may lead to a different amount. Always confirm the final figures with your employer or the Ministry of Human Resources and Emiratisation.
Sources and references
Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relations (Articles 13, 29, 43, 44, 51 and 53); Cabinet Resolution No. 1 of 2022 (Executive Regulations, Articles 19 and 30); Federal Decree-Law No. 9 of 2024 amending Decree-Law 33 of 2021; Cabinet Resolution No. 96 of 2023 on the alternative end of service benefits system; Federal Decree-Law No. 9 of 2022 on Domestic Workers. Official summary: UAE Government portal – End of service benefits for private sector employees.