End of Service Benefits in the UAE: What If You Resign Before One Year?

End-of-Service Benefits Under UAE Labour Law – A Brief Overview

Federal Decree-Law No. 33 of 2021 on the Regulation of the Employment Relationship applies to most private-sector employment across the UAE, including mainland and many free zones, but it does not cover federal and local government employees or domestic workers, who are subject to separate legislation. In the UAE, the end-of-service gratuity for covered private-sector workers is a statutory lump-sum payment paid at the end of employment, usually in addition to the final month’s salary.

Under Article 51, a full-time foreign worker becomes entitled to statutory end-of-service gratuity only after completing at least one year of continuous service with the same employer. Once this threshold is met, the standard UAE gratuity calculation is based on the worker’s basic wage: 21 days’ basic wage for each of the first five years of service, and 30 days’ basic wage for each additional year thereafter.

If total continuous service is less than one year, this calculation does not apply and no statutory gratuity is payable under the standard regime. While certain free zones, contractual arrangements, or alternative end-of-service benefit schemes may introduce specific limits or different mechanisms, the federal UAE Labour Law itself does not impose a fixed monetary cap on gratuity entitlement.

Do You Receive End-of-Service Gratuity if You Resign Before Completing One Year?

Resigning at seven, nine or eleven months often raises the same question: am I entitled to gratuity if I work less than 12 months in the UAE? The Labour Law and MOHRE guidance give a clear answer.

The One-Year Continuous Service Rule

A full-time foreign worker is entitled to the statutory end-of-service gratuity only after completing at least 1 year of continuous service. After that point, gratuity for “parts of the year” (for example, one year and three months) is calculated proportionally, but only because the first complete year has been served. Months worked before reaching one year do not, on their own, generate any statutory gratuity.

Probation counts as part of continuous service if you pass probation and remain with the employer; for instance, six months’ probation plus six months post‑probation equals one year of continuous service. However, if you resign or your contract ends before you have reached 12 months in total, the statutory gratuity entitlement under the standard scheme does not commence.

What You Are Still Entitled To When Leaving Before One Year

Resigning before one year does not erase all rights; it mainly affects end-of-service gratuity. Other entitlements must still be settled under the Labour Law and your contract.

Final Wages Up to Your Last Working Day

When a contract ends — whether by resignation, expiry or termination — the employer must pay all wages and other entitlements due under the law and the contract within 14 days from the end date of employment. Under UAE law, unpaid wages include salary up to your last working day, regardless of how long you have worked or why the contract ended.

This means your final settlement in UAE labour law terms must always include any outstanding salary, overtime that has been earned under company policy, and other regular allowances that are part of your wage package, up to the termination date.

Other Contractual or Policy-Based Benefits

Article 53 also obliges employers to pay entitlements arising from the employment contract, applicable resolutions and the establishment’s by‑laws. Many companies offer additional benefits beyond the legal minimum, such as performance bonuses, commissions, transport or housing allowances, or a company‑specific end-of-service benefits scheme in the UAE that is more generous than the law requires.

Whether you receive these on resignation before one year depends entirely on the wording of your contract and internal policy. For example, a bonus plan may require you to be employed on a specific date or to complete a minimum service period. These benefits are not guaranteed by statute, so you should carefully review your contract, HR policies, and any incentive plan rules, and clarify with HR or, if needed, with support from EGSH.

Resigning During Probation and Before One Year

Probation is often when employees reconsider a role. UAE labour law resignation during probation follows specific notice rules that sit alongside the one‑year gratuity threshold.

Probation Rules and Notice Requirements

The UAE Labour Law permits a probation period of up to six months. During probation, notice requirements are primarily governed by the terms of the employment contract, except where the law expressly provides otherwise. The Labour Law does not set a fixed statutory notice period for an employee who resigns during probation; any notice obligation depends on the contractual agreement between the parties.

Where an employer terminates employment during probation, the law requires the employer to give at least 14 days’ written notice. If either party fails to observe a contractually agreed notice period, compensation may be payable in the amount corresponding to the unserved portion of that notice. These rules apply regardless of whether the employee has completed sufficient service to qualify for end-of-service gratuity.

Special Regimes: Alternative EOSB Savings Scheme and Unemployment Insurance

Beyond the standard gratuity rules, two national schemes may affect the financial consequences of resigning, but in different ways.

Voluntary Alternative End-of-Service Benefits “Savings Scheme”

Cabinet Resolution No. 96 of 2023 introduced a voluntary alternative end-of-service benefits savings scheme, implemented by MOHRE and the Securities and Commodities Authority. Under this model, an employer may opt to enrol eligible employees in an investment‑based fund rather than the traditional gratuity system. Existing accrued gratuity up to the date of joining the scheme is calculated under the standard Article 51 rules, then “frozen”, and the employer starts making periodic contributions into the scheme for future service.

For workers enrolled in such an end-of-service benefits scheme in the UAE, entitlements are governed by the scheme document: contributions, investment returns, vesting and withdrawal conditions replace the one‑year statutory gratuity threshold for that portion of service. However, basic protections such as payment of wages, leave encashment and other contractual rights on termination still derive from the Labour Law and must be respected alongside the scheme rules.

Practical Steps Before You Decide to Resign

Before deciding whether to resign before or after the one‑year mark, it is sensible to review your legal position and documentation. First, confirm that your job is actually covered by the Labour Law. If you work in federal or local government, or as a domestic worker, different legislation applies, and the rules described here may not apply to your situation. Also, check whether your employer has opted into the voluntary alternative EOSB savings scheme or whether you remain under the standard gratuity regime.

Review your employment contract, any HR handbook and incentive plans to identify notice periods, probation terms, bonus conditions and any company‑specific EOS benefits. Calculate an approximate final settlement by adding unpaid wages up to the last working day, expected annual leave encashment based on your basic wage and accrued days, and any contractual benefits you reasonably expect to receive. Understanding this figure helps you judge what benefits you lose if you resign before 1 year in the UAE, compared with waiting until after the one‑year anniversary.

Ensure that your notice to resign is in writing and complies with both the general contractual notice and, if still in probation, the special notice rules in Article 9. Keep copies of payslips, attendance records and correspondence in case of any disagreement about unpaid wages or leave balances. If a dispute arises over your final settlement or you need clarification on how the UAE labour law end-of-service rules apply to your case, you can raise a complaint with MOHRE or work through a licensed government services centre such as EGSH, which can help you prepare applications and follow up with the authorities.

FAQ

Do I get an end-of-service if I resign before 1 year in the UAE?

Under the current UAE Labour Law, a full-time foreign worker is entitled to statutory end-of-service gratuity only after completing at least 1 year of continuous service with the same employer. If your employment ends for any reason, including resignation, before you reach twelve months, no statutory gratuity is payable under the standard regime. You may still receive other contractual benefits if your employer has agreed to them separately.

What happens if I resign before one year in the UAE for my final settlement?

If you resign before one year, your employer must still pay all unpaid wages up to your last working day, plus cash in lieu of any accrued but unused annual leave, calculated on your basic wage. These amounts must be paid within 14 days from the end of the contract, together with any other entitlements due under your employment contract or company by‑laws. The only major statutory entitlement you forgo under the standard scheme is end-of-service gratuity.

How is annual leave paid when resigning in the UAE with less than 12 months’ service?

If you have worked more than six months but less than one year, you accrue at least two days of annual leave per month, and any unused balance must be paid as a cash allowance based on your basic wage when your service ends. Even if your service is less than six months, Article 29(9) and the Implementing Regulation require payment for any legally accrued leave or parts of the year. This annual leave encashment is separate from and unaffected by your lack of gratuity entitlement for one year.

Does probation count towards the end of service in the UAE?

Service during probation counts towards your total period of continuous service only if you continue working after probation and remain with the employer. For example, a six‑month probation followed by six more months of confirmed employment gives you one year of service and therefore basic eligibility for statutory gratuity. If you leave during probation, or at any time before your total continuous service reaches one year, no end-of-service gratuity is payable under the standard rules.

What is the UAE Labour Law's resignation during probation notice requirement?

During probation, if you wish to move to another employer inside the UAE, you must give at least one month’s written notice to your current employer, and the new employer must reimburse recruitment and contracting costs unless otherwise agreed. If you are a foreign worker resigning during probation to leave the UAE, you must provide at least 14 days’ written notice. Failure by either party to respect these periods triggers compensation equal to the wage for the unserved part of the notice.

When must an employer pay the final settlement in the UAE?

Article 53 of the Labour Law requires employers to pay all wages and other entitlements due under the law, contract, relevant resolutions and company by‑laws within 14 days from the end date of the employment contract. This deadline applies whether the employment ended by resignation, expiry, or termination by the employer. If payments are delayed, the worker may file a complaint with MOHRE to enforce the obligation.

Does unemployment insurance pay if I resign in the UAE?

No. The Unemployment Insurance Scheme pays compensation only when an insured employee loses their job due to termination of services, excluding disciplinary dismissal and resignation. Even if you have subscribed for at least 12 consecutive months and otherwise meet the conditions, resigning from your job disqualifies you from receiving unemployment insurance benefits for that specific loss of employment.

What is the difference between gratuity and the savings scheme in the UAE?

Traditional end-of-service gratuity is a statutory lump sum calculated on your basic wage after at least one year of continuous service, using the 21/30‑day formula and subject to a two‑year wage cap. By contrast, the voluntary alternative end-of-service benefits savings scheme is an investment-based arrangement in which employers make periodic contributions to a regulated fund for enrolled employees, and your entitlement depends on contributions and investment performance rather than the one‑year gratuity rule. Any gratuity accrued before joining the scheme is calculated under the standard law and then preserved separately.

This article is intended to provide general information based on official UAE sources, and does not constitute personalised legal advice. Before acting, applicants should verify the current rules and fees directly with the relevant authority or an authorised service centre.