UAE Final Settlement Calculation 2026: Formula, Example and Your Rights

A UAE final settlement calculation adds up everything an employer owes a worker when the job ends: unpaid salary, end of service gratuity, unused annual leave, notice pay if notice was not served, and any other dues in the contract. Federal Decree Law No. 33 of 2021 requires the employer to pay all of it within 14 days of the contract ending.

This guide breaks each part down with the exact legal basis, shows a full worked example, and explains what can and cannot be deducted. Use it to check your figures before you sign the final settlement form.

UAE Final Settlement Calculation: Quick Answer

Item	How it is calculated	Legal basis
Unpaid salary	Full wage for days worked and not yet paid	Article 22
Gratuity	21 days of basic per year for the first 5 years, 30 days per year after	Article 51
Unused annual leave	Leave days due x daily basic wage	Article 29(9)
Notice pay (if notice not served)	Last full wage for the notice period	Article 43
Unpaid overtime	Basic hourly rate plus at least 25%	Article 19
Repatriation ticket	Employer pays, unless the worker joins a new employer or caused the end	Article 13(12)
Payment deadline	Within 14 days of contract end	Article 53

What Is Included in a UAE Final Settlement?

The UAE Labour Law does not use one formula for the whole settlement. Instead, each part has its own rule. Some parts use basic salary, and some use the full wage, which is basic plus allowances.

1. Unpaid Salary up to the Last Working Day

You are owed your full wage, including allowances, for every day worked in the final month that has not been paid. Most payroll teams divide the monthly wage by 30 and multiply by the days worked.

2. End of Service Gratuity

Full time foreign workers who complete at least one year of continuous service get 21 days of basic salary for each of the first five years and 30 days for each later year. Part years count in proportion. Unpaid absence days are not counted, and the total is capped at two years of wage. Our gratuity calculator does this maths for you.

3. Unused Annual Leave

Article 29(9) says unused leave days are paid on basic wage when you leave. The law gives at least 30 days of leave a year after the first year, and you may carry days forward only with your employer’s approval under Article 29(5).

4. Notice Period Pay

Notice must be between 30 and 90 days under Article 43. If either side ends the contract without serving the notice, the other side gets compensation equal to the worker’s last full wage for the notice period or the part not served. Read our guide to notice period rules.

5. Unpaid Overtime and Other Dues

Any overtime not yet paid is added at the basic hourly rate plus at least 25%, or at least 50% for work between 10 pm and 4 am. See our overtime rules guide. Bonuses, commissions or allowances promised in writing in your contract also belong in the settlement.

6. Repatriation Ticket

Under Article 13(12), the employer pays the cost of returning the worker to the place of recruitment. This does not apply if the worker has joined another employer, and the worker pays if the contract ended because of the worker’s fault.

Step by Step UAE Final Settlement Calculation

1. Find your monthly basic salary and total wage in your contract
2. Work out your daily basic rate: basic salary divided by 30
3. Work out your daily wage: total wage divided by 30
4. Count your service in years, months and days, minus unpaid absence days
5. Calculate gratuity using 21 or 30 days of basic per year
6. Multiply unused leave days by the daily basic rate
7. Add unpaid salary days at the daily wage
8. Add notice pay if notice was not served, using the full monthly wage
9. Add unpaid overtime and contractual dues, then subtract lawful deductions

Your basic salary drives most of this. Our guide on basic salary percentage shows how the split between basic and allowances changes the final figure.

UAE Final Settlement Calculation Example

Example: Ravi earns a total wage of AED 10,000 a month, of which AED 6,000 is basic. He resigns after 4 years and 6 months, serves his full 30 day notice, has 12 unused leave days, and has not been paid for the last 20 days worked.

Item	Calculation	Amount (AED)
Daily basic rate	6,000 / 30	200
Daily wage	10,000 / 30	333.33
Gratuity	4.5 years x 21 days x 200	18,900
Unused leave	12 days x 200	2,400
Unpaid salary	20 days x 333.33	6,666.67
Notice pay	Notice served, so none	0
Total final settlement		27,966.67

If Ravi’s employer had ended his contract without notice instead, it would also owe one month of full wage as notice pay, so the total would rise by AED 10,000 to AED 37,966.67.

Resignation vs Termination: Does the Settlement Change?

Situation	Gratuity	Notice pay	Ticket home
Resignation with notice served	Full gratuity if 1 year or more	None	Yes, unless joining a new employer
Resignation without notice	Full gratuity	Worker owes the employer notice pay	Yes, unless joining a new employer
Termination with notice served	Full gratuity if 1 year or more	None	Yes
Termination without notice	Full gratuity	Employer owes notice pay	Yes
Service under 1 year	No gratuity	As above	As above

Under the current law, resigning no longer cuts gratuity. The one year minimum still applies, and the law has no clause that cancels gratuity, even when a worker is dismissed without notice under Article 44.

Unlawful Termination Compensation

If the termination is found to be unlawful under Article 47, for example because the worker filed a serious complaint with MOHRE or a valid lawsuit against the employer, the worker can get extra compensation of up to 3 months of the last wage. This is paid on top of notice pay and gratuity, not instead of them.

Note for DIFC and ADGM employees: these financial free zones have their own employment laws, so their end of service rules differ. For example, DIFC employers pay into the DEWS savings plan instead of a gratuity, so check the rules of your zone before you calculate.

What Can Your Employer Deduct?

• Amounts owed by law or court judgment can be deducted from gratuity (Article 51)
• Overpaid salary can be recovered, but each deduction cannot exceed 20% of the wage (Article 25)
• Penalty deductions cannot exceed 5% of the wage (Article 25)
• All deductions together cannot exceed 50% of the wage (Article 25)

Your employer also cannot keep your passport as security for the settlement. Article 13 bars employers from holding a worker’s official documents.

When Must the Final Settlement Be Paid?

Article 53 gives the employer 14 days from the end of the contract to pay wages and all other dues. If payment is late, you can file a MOHRE complaint through the MOHRE website or app. Act quickly: Article 54 says labour claims cannot be heard after one year from the date the right was due.

After the Settlement: Visa, ILOE and Next Steps

• Your employer cancels the work permit and residence visa. See our visa cancellation guide
• Check how long you can stay with a grace period check
• If you lost your job for reasons outside your control, you may claim ILOE insurance through the ILOE portal
• Keep copies of your settlement statement, payslips and contract

Checklist Before You Sign the Final Settlement Form

• Your service dates are correct, including your start date
• Gratuity uses your last basic salary, not an older figure
• All unused leave days are listed
• Unpaid salary and overtime are included
• Every deduction is explained and within the legal limits
• Notice pay is correct for your situation
• The payment date is within 14 days of your last day

Latest Updates on UAE Final Settlement Rules

Date	Update
2 February 2022	Federal Decree Law No. 33 of 2021 came into force, with a 14 day payment deadline
1 January 2023	ILOE job loss insurance began for private sector and federal workers
October 2026	No change to the gratuity formula, the 14 day deadline or deduction limits

Last verified: October 2026 against the UAE Labour Law text, MOHRE and the ILOE scheme.

Conclusion

A UAE final settlement calculation is simple once you split it into parts: unpaid salary, gratuity, unused leave, notice pay, overtime and the ticket home, minus lawful deductions. Gratuity and leave use basic salary, while unpaid salary and notice pay use the full wage.

Check every line before you sign and expect payment within 14 days. For more guides on your rights at work, visit our UAE Laws section.

Frequently Asked Questions

How is the UAE final settlement calculation done?

Add unpaid salary, gratuity, unused leave pay, notice pay if notice was not served, unpaid overtime and contractual dues, then subtract lawful deductions.

How many days does an employer have to pay the final settlement in the UAE?

14 days from the end of the contract, under Article 53 of Federal Decree Law No. 33 of 2021.

Is final settlement calculated on basic salary?

Partly. Gratuity and unused leave use basic salary, while unpaid salary and notice pay use the full wage.

Do I get gratuity if I resign in the UAE?

Yes, if you completed at least one year of continuous service. Resigning no longer reduces gratuity under the current law.

Is leave salary part of the final settlement?

Yes. Unused annual leave days are paid on your basic wage under Article 29(9).

Can my employer deduct money from my final settlement?

Yes, but only amounts due by law or judgment, and wage deductions must stay within the limits in Article 25.

What if my employer does not pay my final settlement?

File a complaint with MOHRE through its website or app. Claims must be raised within one year under Article 54.

Do I get notice pay if I am terminated without notice?

Yes. The employer must pay your last full wage for the notice period or the part not served.

Is the air ticket part of the final settlement?

The employer pays repatriation costs to your place of recruitment, unless you join a new employer or the contract ended because of your fault.

Do I get gratuity for less than one year of service?

No. Gratuity requires at least one year of continuous service.

References

• UAE Labour Law: Federal Decree Law No. 33 of 2021 (UAE Government)
• MOHRE: Ministry of Human Resources and Emiratisation
• ILOE Scheme: Involuntary Loss of Employment insurance