UAE end of service savings scheme or gratuity? Five questions for HR before you resign

Tips · 2026-10-25 · 9 min read

A South Asian professional reviews settlement papers with an HR colleague in a bright Dubai office.

The UAE end of service savings scheme is the alternative to the classic gratuity: instead of one payment calculated when you leave, your employer contributes a share of your monthly basic salary as you work, 5.83 per cent while you have under 5 years of service and 8.33 per cent after 5 years. The traditional gratuity pays 21 days' basic salary for each year between 1 and 5 years, 30 days for each year after that, nothing under 1 year, and never more than 2 years' wage. Which of the two applies to you changes what you should ask HR before you resign for a role in Australia or New Zealand.

Two ways to fund the same entitlement

End-of-service benefits for private-sector workers in the UAE sit under Federal Decree Law No. 33 of 2021, the UAE Labour Law. "End-of-service gratuity" is the official term for the payment due at the end of employment.

Under the traditional system, the figure is worked out at the end, from your last basic salary and your years of service, and paid in your final settlement.

Under the alternative savings scheme, the employer makes contributions during your employment: 5.83 per cent of your monthly basic salary if you have not completed 5 years of service, or 8.33 per cent if you have served more than 5 years. The UAE government's end-of-service benefits page sets out both systems side by side.

Our earlier guide shows how the traditional end-of-service gratuity is calculated in detail. This page is about choosing the right questions when you are not sure which system your employer uses.

The two contribution rates against the classic gratuity

Put the scheme's rates on a year and they sit very close to the gratuity formula. The table uses every AED 100 of monthly basic salary as a simple yardstick, and, for the gratuity column, counts a month as 30 days.

Length of service	Traditional gratuity, per AED 100 of monthly basic	Savings scheme, per AED 100 of monthly basic
Less than 1 year	Nothing: no gratuity under 1 year of service	Employer contributes 5.83 per cent each month, AED 5.83
More than 1 year, less than 5	21 days' salary a year, about AED 70 a year	5.83 per cent a month, about AED 69.96 a year
Each year after the first 5	30 days' salary a year, about AED 100 a year	8.33 per cent a month, about AED 99.96 a year
Salary used	Last basic salary, no housing or transport allowances	Monthly basic salary
Upper limit	Total cannot exceed 2 years' wage	Ask HR how your scheme treats long service

So for most service lengths, the money is in the same range. What differs is the timing, the place the money sits while you work, and what you need to check before your last day.

The first row deserves a careful look. The gratuity rules give nothing for less than 1 year, while the scheme's rate is set per month of basic salary. If you joined your current employer recently, ask HR in writing how your scheme treats service of under a year.

Why basic salary matters more than your package

Both systems run on basic salary. The gratuity is calculated on the last basic salary you were entitled to, and does not include allowances such as housing or transport. The scheme's rates are also a percentage of monthly basic salary.

If your offer letter in Dubai or Abu Dhabi shows a large total but a smaller basic, the basic is the figure that drives your end-of-service money, under either system.

Take your contract out now and find the basic salary line. Every estimate you make should start there.

Five questions to put to HR before you resign

Am I on the traditional gratuity or the alternative savings scheme? Ask for the answer in writing, with the date the arrangement started.
If I moved to the scheme part-way through, what happened to the gratuity I had already earned? You want a clear statement of the earlier service and how it was settled or carried.
Which basic salary figure is used? Check that it matches your contract and your latest payslip, without allowances.
Where can I see what has been contributed for me, and when is it paid after I leave? Ask for a statement you can keep.
What will my final settlement include, and on what date? The UAE government says employers must pay all outstanding wages, other entitlements and gratuity within 14 days of the termination of the contract.

Put the questions in one email, keep the replies, and match them against the official page. If the answers do not add up, MOHRE (the Ministry of Human Resources and Emiratisation) takes employment enquiries on 009716-802-7666, by email at ask@mohre.gov.ae or by live chat.

Timing your exit around an offer from Australia or New Zealand

End-of-service money is only one part of a well-timed exit. The order that protects you is the same whichever system you are on.

Wait for the visa, then resign

Avoid resigning, ending a lease or committing money in the Gulf on the strength of a job listing alone. Wait until you hold a confirmed offer and the necessary approvals. A subclass 482 visa holder who is outside Australia when the visa is granted must begin employment within 90 days of entering Australia, so there is time to serve notice properly once the grant arrives. Our 482 visa guide walks through the Australian steps.

Serve your notice

Under Article 43 of the UAE Labour Law, notice must be at least 30 days and no more than 90 days, and the party who fails to serve it must compensate the other with a notice period allowance. So agree any shorter notice in writing. Our guide to the UAE notice period on resignation shows how to fit it between visa grant and start date.

Still within probation? Different rules apply, including 14 days' written notice when you leave the UAE, as explained in our guide to resigning during probation to leave the country.

Sign the settlement letter only when you are paid

To cancel your labour contract, the company must give MOHRE a letter from you confirming receipt of all wages and end-of-service benefits. Your signature on that letter is your confirmation, so sign it once the money, gratuity or scheme balance, is actually settled. The UAE government's residence visa provisions describe the cancellation steps.

Use the grace period well

After cancellation, ICP grants a 30-day grace period for most residents, 90 days for skilled workers in levels 1-3, and 180 days for Golden, Green and Blue Residence holders and some others. Overstaying after that costs AED 50 a day. Our guide to the UAE visa cancellation grace period covers the timing.

Paperwork to finish while you are still a resident

Your last weeks in the UAE are the easiest time to collect what Australia or New Zealand may ask for later.

Police clearance: Home Affairs lists the Ministry of Interior and Dubai Police as the UAE police check contacts. Dubai Police lists its certificate at AED 200 for residents and AED 300 or $88 for applicants outside the UAE, plus a knowledge and innovation fee of AED 20. See our guide to UAE police clearance validity before you apply, so it is still current when it is needed.
Service letters and payslips: collect a letter confirming your title, dates and duties, and keep your final payslips with your settlement statement.
Your CV: update it while your projects are fresh. Build AI CV helps you set out UAE roles in a format Australian employers read easily. Optional: a verified Talent Tabloid profile lets employers check your experience and can help your application stand out.

If you are still choosing your next role, our visa sponsorship jobs in Australia for UAE residents page lists employers sponsoring on the 482, including roles such as this civil engineering technician position in Perth.

Common mistakes with end-of-service money

Assuming you are on the traditional gratuity. Some employers use the alternative savings scheme. Ask, and get the answer in writing.
Estimating from your total package. Both systems use basic salary only.
Resigning before the visa is granted. Wait for a confirmed offer and the approvals before you commit.
Cutting your notice short without agreement. The party who does not serve notice owes the other a notice period allowance.
Signing the receipt letter early. It confirms you have received all wages and end-of-service benefits.
Leaving the paperwork until after you fly. Police certificates and service letters are simpler to arrange while you are still resident.

Frequently asked questions

What is the UAE end of service savings scheme?

It is the UAE's alternative end-of-service system, in which the employer contributes a share of your monthly basic salary during employment instead of paying one gratuity at the end. The rate is 5.83 per cent before 5 years of service and 8.33 per cent after 5 years.

Is the savings scheme worth more than the traditional gratuity?

Measured on the employer's contribution rates, the two are close: 5.83 per cent a month comes to about 70 per cent of one month's basic salary a year, roughly the 21 days of the gratuity formula. Compare your own figures with HR rather than relying on a general rule.

Do allowances count towards my end-of-service money?

No. The gratuity is calculated on your last basic salary and does not include allowances such as housing or transport, and the scheme's rates are a percentage of monthly basic salary as well.

When must my employer pay my end-of-service benefits?

The UAE government says employers must pay all outstanding wages, other entitlements and gratuity within 14 days of the termination of the contract. Ask HR for the exact date and what the settlement will include.

Should I resign before my Australian visa is granted?

It is safer not to. Wait until you hold a confirmed offer and the necessary approvals, then serve your notice of 30 to 90 days under Article 43. A 482 holder granted the visa outside Australia must start work within 90 days of entering.

Key takeaways

The savings scheme pays 5.83 per cent of monthly basic salary under 5 years of service and 8.33 per cent after.
The traditional gratuity pays 21 days a year up to 5 years, 30 days a year after, capped at 2 years' wage.
Both run on basic salary, so check that figure first.
Ask HR in writing which system you are on before you resign.
Sign the MOHRE receipt letter only once your final settlement has been paid.

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