Question 1

How is UAE end-of-service gratuity calculated under the standard MoHRE system?

Accepted Answer

For a full-time foreign worker who has completed at least one year of continuous service, Article 51 of Federal Decree-Law No. 33 of 2021 provides 21 days of the last basic wage for each year of service during the first five years and 30 days for each year after five years. Fractions after the one-year threshold are paid proportionately, unpaid absence is excluded from the service period, and the total gratuity cannot exceed two years of wage.

Question 2

What is the UAE Voluntary Alternative End-of-Service Savings Scheme?

Accepted Answer

Cabinet Resolution No. 96 of 2023 created an optional alternative system under which participating employers register selected workers and pay monthly basic subscription amounts into approved investment funds rather than continuing the traditional gratuity system for the covered period. MoHRE and the SCA regulate the federal scheme and approve participating investment funds.

Question 3

How much does an employer contribute to the federal Savings Scheme?

Accepted Answer

For a full-time beneficiary, the basic monthly subscription is 5.83% of basic wage when the employee has no more than five years of continuous service and 8.33% when the service period exceeds five years. The service period used for choosing the rate starts from the employee’s employment date, not from the date the employee joins the Savings Scheme.

Question 4

Does an employee lose gratuity accrued before joining the Savings Scheme?

Accepted Answer

No. The Cabinet Resolution preserves the gratuity accrued before the employee enters the alternative scheme. The employer must calculate the gratuity due up to the participation date, and the alternative system applies to the covered period after joining the scheme.

Question 5

Can employees make additional voluntary contributions to the Savings Scheme?

Accepted Answer

Yes. Cabinet Resolution No. 96 of 2023 allows additional voluntary subscriptions. For monthly voluntary contributions, the percentage cannot exceed 25% of the employee’s total salary; a lump-sum voluntary contribution is subject to the same 25% annual ceiling specified by the resolution.

Question 6

Is DIFC DEWS the same as the UAE federal Voluntary Savings Scheme?

Accepted Answer

No. DIFC DEWS is a separate workplace savings regime operating under DIFC employment legislation. The federal Voluntary Alternative End-of-Service Scheme is governed by Cabinet Resolution No. 96 of 2023 and MoHRE/SCA. A DIFC employer should be assessed under the DIFC regime rather than automatically applying the federal MoHRE scheme.

System	Who/where	Core mechanism
MoHRE statutory gratuity	Standard federal labour-law employment relationships.	Lump-sum end-of-service benefit based on the applicable statutory formula.
Federal Savings Scheme	Employers that voluntarily subscribe and register selected workers under Cabinet Resolution 96/2023.	Employer monthly basic subscription into approved investment funds.
DIFC DEWS	DIFC employment regime.	DIFC workplace savings regime under DIFC law.

First 5 years	21 days / year
Beyond 5 years	30 days / year
Wage basis	Last basic wage
Minimum service	1 year continuous service
Maximum	24 months' wage
Final-payment deadline	14 days after contract end

Issue	Current rule
Full-time foreign worker	Article 51 calculation.
Less than 1 year	No standard Article 51 gratuity.
Resignation	No old-style statutory resignation reduction in Article 51.
Unpaid absence	Excluded from service term.
Maximum	Two years' wage.

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