How does the gratuity rule work?
Under UAE Labour Law, end-of-service gratuity for a full-time employee is worked out on the basic wage at 21 / 30 days per year of service: the lower figure for the early years and the higher one after that, with a cap on the total. An employee who leaves before completing the qualifying service is not entitled to gratuity.
Because only basic wage counts, the split between basic salary and allowances in each contract directly sets the gratuity a company owes.
Why accrue gratuity every month?
Gratuity is earned every month an employee works, but paid only when they leave. Accruing it monthly keeps the liability on the balance sheet at its real size, so a run of exits on a finished project does not arrive as a surprise, and monthly results show the true cost of the workforce.
What goes into a final settlement?
When an employee leaves, the final settlement brings everything owed in both directions onto one statement before the last payment is made.
- End-of-service gratuity for the full period of service
- Encashment of unused annual leave
- Salary for days worked in the final month
- Deductions such as outstanding loans and advances
What are the Emiratisation targets for a contractor?
Larger private companies raise the share of UAE nationals in skilled roles by 2% a year, and smaller companies in specified sectors, construction among them, have an annual hiring target of their own. Missing a target leads to a monthly financial contribution. The Nafis programme supports Emirati hiring in the private sector.
Which workforce documents need tracking?
Visas, Emirates IDs and labour cards each expire on their own schedule, and an expired document can stop a worker from being deployed or paid. Contractors also house site staff in labour camps, whose cost belongs to the sites they serve. Payroll then has to reach the bank through WPS.
UAE compliance figures at a glance
| Rule | Figure | Source |
|---|---|---|
| End-of-service gratuity for full-time employees with at least one year of continuous service, at 21 days' basic wage per year for the first five years, 30 days' basic wage per year after that, capped at two years' wage in total | 21 / 30 days | Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, Article 51 |
| Private companies with 50 or more employees raise the share of Emiratis in skilled roles by 2% a year; companies with 20–49 employees in specified sectors, including construction, employ at least one Emirati a year | 2% a year | Cabinet resolutions on Emiratisation targets; Nafis programme |
Last reviewed 14 Nov 2026. A summary, not tax or legal advice. Confirm your obligations with an adviser.
How Civova handles this
Civova accrues end-of-service gratuity monthly for each employee under UAE Labour Law, pays no gratuity under the qualifying service, and produces final settlements with gratuity, leave encashment and any notice pay (outstanding loans are settled separately). Visas, Emirates IDs and labour cards carry expiry alerts; camp rooms are costed to sites; and Emiratisation tracking shows the required and actual numbers and the monthly contribution at risk.
Rules can change and individual contracts differ, so treat this page as general information, not legal advice.