UAE Final Settlement Calculator
Updated August 2026 · Based on UAE Labour Law (Federal Decree-Law No. 33 of 2021)
Combine gratuity, unused-leave encashment, pending dues and deductions into your net full & final settlement.
Quick answer
A UAE full and final settlement is the total amount payable when your employment ends. It combines your end-of-service gratuity, encashment of any unused annual leave and pending salary or dues, minus deductions such as a notice-period shortfall, loans or advances. By law it must be paid within 14 days of the end of the contract.
| Component | Effect on settlement |
|---|---|
| End-of-service gratuity (EOSB) | Added |
| Unused annual-leave encashment | Added |
| Pending salary to the last working day | Added |
| Notice pay, where notice is not worked | Added or deducted, depending on the circumstances |
| Unpaid overtime, commission or approved expenses | Added |
| Outstanding loans and salary advances | Deducted |
| Payment deadline | Within 14 days of contract end |
How is a UAE final settlement calculated?
Your settlement under UAE Labour Law (Federal Decree-Law No. 33 of 2021)brings together everything owed when employment ends. Each component has its own basis, which is why a single figure quoted without a breakdown is difficult to check:
- End-of-service gratuity — 21 days of basic pay for each of the first five years and 30 days for each year after that, capped at two years' basic wage.
- Leave encashment — unused annual-leave days × the daily wage.
- Pending salary — earned up to the last working day.
- Notice pay — where the notice period is paid rather than worked.
- Less deductions — outstanding loans, advances and any notice shortfall.
Worked example — a five-year exit
Basic AED 10,000, 5 years of service, 12 unused leave days, AED 6,000 loan outstanding
Daily wage = 10,000 ÷ 30 = AED 333.33
Gratuity = 21 days × 5 years × 333.33 = AED 35,000
Leave encashment = 12 × 333.33 = AED 4,000
Subtotal = 35,000 + 4,000 = AED 39,000
Less loan = 39,000 − 6,000 = AED 33,000 net
The sixth year would be the first to attract 30 days rather than 21, so an exit shortly after the five-year mark is worth materially more than one shortly before it.
Worked example — an exit before the five-year mark, with notice not served
Basic AED 8,000, 2 years 7 months of service, 5 unused leave days, resigned and left 20 days into a 30-day notice period
Daily wage = 8,000 ÷ 30 = AED 266.67
Gratuity days = (21 × 2 full years) + (21 × 7/12) = 42 + 12.25 = 54.25 days
Gratuity = 54.25 × 266.67 = AED 14,466.67
Leave encashment = 5 × 266.67 = AED 1,333.33
Pending salary, 10 days worked = 10 × 266.67 = AED 2,666.67
Less 20 days of notice not served = AED 5,333.33
Net settlement = AED 13,133.34
Two things in this example are worth noticing. The seven months beyond the second completed year are pro-rated rather than ignored, which is a common source of under-payment on short-service exits. And the notice shortfall is shown here on the same basic-wage daily rate for consistency with the rest of the calculation — the basis for notice compensation is one of the items to confirm against your own contract rather than assume.
For a gratuity-only figure, use our UAE Gratuity Calculator; for leave alone, the Leave Salary Calculator handles accrual and encashment in more detail.
Notice periods
Where notice is not worked, the settlement is normally adjusted for it — as payment in lieu where the employer terminated without notice, or as a deduction where the employee left early. The length of notice and the compensation due are set by the contract and the law, so check the contract wording and confirm the position with MOHRE if it is disputed.
Employment continues during a worked notice period, so leave keeps accruing and the service used for gratuity keeps running to the last day.
What an employer may deduct
The UAE Government states that an employer may deduct amounts the employee owes from the gratuity — in practice, items such as an outstanding staff loan or salary advance. Deduction is not a general right of set-off. Where an amount is disputed the route is MOHRE rather than unilateral withholding, and it is reasonable to ask for the settlement broken down component by component before signing anything.
The 14-day rule
The employer must settle wages and entitlements within 14 days of the end of the contract. The obligation runs from the contract ending, and is not conditional on the employee first signing a full-and-final receipt. Being asked to sign before seeing the calculation is worth questioning, and a breakdown by component is a reasonable thing to ask for.
Where payment does not arrive, the route is a written request to the employer, then a complaint to the Ministry of Human Resources and Emiratisation, which handles private-sector labour disputes and refers unresolved matters onward. Keep the contract, payslips and correspondence.
How to check a settlement statement before you sign it
Most disputes we hear about are not disagreements over the law. They are cases where one side produced a single number and the other side had no way to test it. A settlement that arrives as a breakdown can be checked in a few minutes, and the checks are the same every time.
- Confirm the service dates. Gratuity runs from the joining date to the last day of the contract, and a worked notice period is part of that service. A statement that stops the clock at the resignation letter rather than the last working day produces a shorter service period than the one actually served.
- Check which salary figure was used. Gratuity is calculated on basic salary, not total package — housing, transport, utilities and similar allowances sit outside it. If the statement shows a daily wage, work backwards from it and see which salary it came from.
- Check the daily-wage divisor. Dividing the monthly basic by 30 is the usual convention. A different divisor changes every line that depends on a daily rate, so it is worth establishing once rather than per component.
- Test the year bands. Twenty-one days apply to each of the first five years and thirty days to each year after that. On a service length that straddles the five-year mark, check that only the years beyond it were paid at the higher rate.
- Reconcile the leave balance. Compare the days encashed against your own record of leave taken. Leave keeps accruing through a worked notice period, and public holidays falling inside a leave period are treated as part of that leave rather than as extra days.
- Ask for deductions to be itemised. A single "deductions" line is not checkable. Each amount should name what it is for, and you should be able to match it to a loan agreement, an advance, or an unserved notice period.
If a component is missing rather than wrong — unpaid overtime, an approved expense claim, a commission already earned — raise it while the statement is still a draft. It is a different conversation once the payment has been made.
Where the two sides usually disagree
These are the recurring points. None of them is unusual, and most come from the two sides working from different records rather than from anyone acting in bad faith.
| Point | What usually settles it |
|---|---|
| Basic versus total salary | The contract and the payslips. Gratuity is calculated on basic pay, so a statement built on total package produces a figure neither side can reconcile later. |
| The leave balance | The leave register against the employee's own record. Where an employer tracks leave on a spreadsheet updated by hand, the two records tend to drift over a few years. |
| The basis for encashment | Leave taken during employment and leave encashed at the end are treated differently, and the second is dealt with on basic salary. Establishing which basis was used removes most of the argument. |
| Unpaid absence | Days of unpaid absence do not count toward the service used for gratuity, so a long unpaid period shortens the calculation. This is worth agreeing before the statement is drawn up. |
| The notice period | The contract sets the length. Whether it was worked, waived or paid in lieu decides whether it is added or deducted, and the two sides often remember that conversation differently. |
| Pro-rating a partial year | Service beyond a completed year is pro-rated rather than dropped. On short service that fraction is a meaningful part of the total. |
For an employer, the underlying problem is usually record-keeping rather than intent: service dates in one place, leave balances in another, advances in a third. Where those sit in one system the settlement is an extract rather than a reconstruction. That is what Avance HRMS is for, and it is also why we publish the arithmetic here rather than only the tool.
Estimate for guidance only — this is not legal advice. Entitlements vary by contract and by the circumstances of the exit, and several items above turn on facts this page cannot see. Confirm your position with MOHRE or a qualified adviser before relying on a figure.
Primary source: Federal Decree-Law No. 33 of 2021 and Cabinet Resolution No. 1 of 2022, summarised on u.ae. Reviewed August 2026.
Frequently asked questions
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