Final Settlement in the UAE

Q: What is included in a UAE final settlement?

A final settlement typically includes your end of service gratuity, any unpaid salary up to your last working day, payment for accrued but unused annual leave, and any other contractual dues, minus lawful deductions such as outstanding advances.

Q: Can the employer deduct money from my final settlement?

Lawful deductions — such as repayable salary advances, unreturned company assets or amounts agreed in your contract — can be applied. Deductions must be lawful and documented; query anything you do not recognise.

When you leave a job in the UAE, your employer prepares a final settlement that brings together everything you are owed. This guide breaks down what it includes, how each part is worked out, the typical timeline, and a checklist to make sure nothing is missed.

Estimate Your Gratuity What's included

Last reviewed: 19 June 2026

What a final settlement includes

A UAE final settlement (sometimes called full and final settlement) usually brings together several components into one payment:

Component	What it is
End of service gratuity	Lump sum based on basic salary and service length
Unpaid salary	Salary earned up to the last working day
Leave encashment	Payment for accrued but unused annual leave
Other contractual dues	Any agreed amounts, e.g. pending allowances
Deductions	Lawful amounts subtracted (advances, assets, etc.)

Gratuity

Gratuity is usually the largest part of the settlement. It is calculated on basic salary: 21 days of basic wage per year for the first five years and 30 days per year afterwards, capped at two years' basic wage. Estimate yours with the gratuity calculator, and read the full guide for the method.

Leave balance encashment

Any annual leave you accrued but did not take is typically paid out. Encashment is usually based on your salary for the number of outstanding leave days. See our annual leave guide for how leave accrues and is paid.

Unpaid salary

Salary earned from the start of your last pay cycle up to your last working day is included, so you are paid for every day actually worked.

Deductions

Lawful deductions can reduce the settlement — for example a repayable salary advance, a loan agreed with the employer, or the value of company assets not returned. Deductions should be lawful and itemised; ask for clarification on anything you do not recognise.

Timelines

Final settlements are generally paid within a short period after the last working day, in line with the labour law and your contract. Visa cancellation and company clearance steps can influence the exact date, so keep your handover and paperwork tidy to avoid delays. See the notice period guide for how the exit timeline fits together.

Worked example

An employee with a basic salary of AED 8,000 leaves after 3 years, with 8 worked days in the final month and 10 unused leave days (encashed on basic salary):

Item	Working	Amount
Gratuity (3 yrs)	266.67 × 21 × 3	AED 16,800
Unpaid salary (8 days)	266.67 × 8	AED 2,133
Leave encashment (10 days)	266.67 × 10	AED 2,667
Less: salary advance	—	−AED 1,000
Estimated settlement		AED 20,600

Illustrative only. Daily wage here is basic ÷ 30 = AED 266.67. Your contract defines how leave and dues are calculated.

Settlement checklist

Confirm your last working day and any notice arrangement.
Estimate your gratuity from your basic salary.
Check your accrued leave balance and how it is encashed.
Confirm unpaid salary days.
Review every deduction line and ask about anything unclear.
Keep copies of your contract, pay slips and the settlement statement.
Track visa cancellation and clearance steps.

Start with your gratuity estimate

The biggest part of most settlements is gratuity — estimate it in seconds.

Open the Calculator

Frequently asked questions

What is included in a UAE final settlement?

Typically your end of service gratuity, any unpaid salary up to your last working day, payment for accrued but unused annual leave, and other contractual dues, minus lawful deductions such as outstanding advances.

How is unused leave paid in the final settlement?

Accrued but unused annual leave is usually encashed based on your salary, commonly the basic salary, for the number of outstanding days. Check your contract for the exact definition.

When is the final settlement paid in the UAE?

Generally within a short period after the last working day, as set out in the labour law and your contract. Visa cancellation and clearance steps can affect the timing.

Can the employer deduct money from my final settlement?

Lawful deductions — such as repayable advances, unreturned company assets or amounts agreed in your contract — can be applied. They must be lawful and documented; query anything you do not recognise.

Official sources & further reading

Confirm details with the UAE Government portal (u.ae) and MOHRE. On this site, see the annual leave guide, the notice period guide, and the gratuity guide.

🌴