UAE Voluntary End-of-Service Savings Scheme Guide
Understand the UAE Savings Scheme, employer contribution tiers, pre-enrolment gratuity, voluntary employee contributions, investment options and what happens when employment ends.
Based on current UAE Government, MoHRE and UAE legislation materials checked for 2026. Investment returns and individual legal outcomes are not guaranteed.
What is the UAE Savings Scheme?
Cabinet Resolution No. 96 of 2023 established the Voluntary Alternative End-of-Service Benefits System. It provides an optional alternative to the ordinary end-of-service gratuity system for participating employees.
An employer that chooses to participate applies through MoHRE and selects an investment fund approved by the Securities and Commodities Authority. For employees enrolled in the scheme, the employer makes a monthly basic subscription based on the employee’s basic salary and continuous service.
The scheme therefore has two distinct ideas: a statutory employment entitlement and an investment account structure. Investment returns can increase the account value, but an investment projection should never be presented as a guaranteed return.
Who supervises the scheme?
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Employer contribution rates
The basic contribution is calculated from the employee’s monthly basic salary and the employee’s continuous service with the employer. The service clock starts with the employment date, not the date the worker joins the Savings Scheme.
| Service position | Employer rate | Calculation basis | Important point |
|---|---|---|---|
| Not more than 5 completed years of continuous service | 5.83% | Monthly basic salary | Exactly five completed years remains in this tier because the higher rate applies only after five years have been exceeded. |
| More than 5 completed years of continuous service | 8.33% | Monthly basic salary | The higher rate applies once the worker has served more than five years. |
| Employee voluntary contribution | Up to 25% | Total wage | The 25% ceiling applies to the voluntary contribution and is separate from the employer’s basic subscription. |
Worked contribution examples
Example: AED 15,000 salary, 4 years
At four completed years, the employer contribution rate is 5.83%. A monthly basic contribution is approximately AED 874.50.
Example: AED 15,000 salary, exactly 5 years
At exactly five completed years, the rate remains 5.83% because the higher 8.33% rate starts only after more than five years. A monthly basic contribution is approximately AED 874.50.
Example: AED 15,000 salary, 6 years
Once the employee has served more than five years, the 8.33% rate applies. A monthly basic contribution is approximately AED 1,249.50.
What happens to existing gratuity?
When an employer enrolls a worker in the alternative scheme, the employer must stop applying the traditional gratuity system to that worker after enrolment and must calculate the gratuity already accrued before the change in accordance with the applicable law.
What does the employee ultimately have?
Gratuity vs Savings Scheme illustrative calculator
This calculator is an educational projection. It assumes a constant basic salary, monthly employer contributions and the selected annual investment return. It does not guarantee fund performance and does not replace the official calculation of employment entitlements.
How employer participation works
Additional employee contributions
An enrolled worker can make voluntary additional contributions to the investment account. The rules permit monthly payroll-based contributions or lump-sum payments, subject to the applicable ceiling.
| Monthly voluntary contribution | Up to 25% of total wage |
| Lump-sum voluntary contribution | Up to the same 25% ceiling annually |
| Payment route | Payroll deduction or direct lump-sum transfer |
Investment options
What happens when employment ends?
Pre-enrolment gratuity
Traditional end-of-service gratuity accrued before joining the scheme remains a separate entitlement and must be calculated under the applicable labour law.
Employer basic subscription
The monthly basic contributions paid by the employer become part of the employee’s scheme entitlement according to Cabinet Resolution No. 96 of 2023 and the applicable fund rules.
Investment return
Investment returns can increase or decrease the value of the invested balance depending on the selected fund and its performance. A growth estimate is not a guaranteed return.
Employee voluntary contributions
Additional employee contributions are separate from the employer’s basic subscription and are subject to their own contribution ceiling and scheme treatment.
Traditional gratuity versus the Savings Scheme
| Feature | Traditional gratuity | Savings Scheme |
|---|---|---|
| Employer obligation | Statutory end-of-service gratuity for eligible workers. | Monthly basic subscription for enrolled workers. |
| Calculation basis | Basic wage and qualifying continuous service. | Basic salary and continuous service-based percentage. |
| Investment return | No investment-fund return mechanism. | Contributions are invested through the approved fund. |
| Pre-enrolment entitlement | Not applicable because the worker has not switched schemes. | Gratuity accrued before enrolment remains separately relevant. |
| Employee top-up | Not a Savings Scheme feature. | Optional additional contribution up to the applicable 25% ceiling. |
| Investment risk | Not dependent on an investment-fund portfolio. | Depends on the selected investment option and fund performance. |
Financial free zones and other work patterns
The standard full-time employee rates are the core figures used in this guide. Cabinet Resolution No. 96 of 2023 and the related ministerial framework also address other work patterns and jurisdictions.
Financial free-zone authorities have responsibility for supervision and dispute handling within their own jurisdictions. The contribution method for part-time, job-sharing and other work arrangements should therefore be checked against the applicable ministerial decision rather than automatically applying the full-time calculation.
Related UAE Tools & Guides
2026 VerifiedFrequently Asked Questions About UAE Workplace Savings
Official primary sources
These sources are provided for direct verification of the legislation, scheme rules and current government guidance. The webpage itself is not government-certified or “verified” by MoHRE or SCA.