Resignation no longer reduces your gratuity

This is the single change most people — and most calculators — have not caught up with. If you are being told that resigning costs you a third or two-thirds of your gratuity, you are being quoted a law that was repealed on 2 February 2022.

The current position

Under Federal Decree-Law No. 33 of 2021, an employee who completes one year of continuous service receives the same end-of-service gratuity whether they resign or the employer ends the contract. There is no reduction, no sliding scale, and no distinction between the two.

What the old law said

Federal Law No. 8 of 1980 distinguished between limited and unlimited contracts, and penalised an employee on an unlimited contract who resigned:

The repealed scale — resignation on an unlimited contract under the 1980 law. Shown for reference only. **This no longer applies to anyone.**
Completed service	Proportion payable	Lost
Under 1 year	Nothing	All of it
1 to 3 years	One third	Two thirds
3 to 5 years	Two thirds	One third
5 years or more	All of it	Nothing

An employee on 10,000 AED basic who resigned after two years received one third of 14,000 AED — about 4,667 AED. The same person today receives the full 14,000 AED. That is a three-fold difference on identical facts, and it is why using an out-of-date calculator is not a rounding error.

What changed, and when

Federal Decree-Law No. 33 of 2021 came into force on 2 February 2022 and repealed the 1980 law in its entirety. Two things happened at once:

The limited/unlimited distinction was abolished. All employment contracts under the federal law became fixed-term. The penalty attached specifically to unlimited contracts, and the category no longer exists.
Article 51 sets one entitlement — 21 days per year for the first five, 30 thereafter — with no clause reducing it according to who ended the contract.

Existing unlimited contracts were required to be transitioned to the new regime. Whatever your contract was called when you signed it, the current law governs a settlement calculated today.

How to tell if a calculator is out of date

Two tells, both immediate:

It asks whether your contract is limited or unlimited. That distinction was abolished in 2022. Any tool still asking is applying the old framework.
Your figure drops when you say you resigned. Under the current law it should not move at all.

The calculator on this site asks how the employment ended for one reason only: so it can show you what the old scale would have taken, and demonstrate that it no longer does. The payable figure is identical either way.

What resignation does still affect

Gratuity is not reduced. Other things can be:

Notice. You owe the notice period in your contract, between 30 and 90 days. Leaving without serving it can make you liable for compensation in lieu — but that is a separate debt, not a deduction from the gratuity formula.
Repatriation air fare. Whether it survives resignation depends on your contract wording, not on Article 51.
Probation. Resigning during probation to move to another UAE employer carries its own rules on who bears the recruitment cost. Gratuity does not arise at all, because probation is under a year.
Absconding. Leaving without notice and without completing the formalities is a different matter entirely, with immigration consequences that are outside the scope of this site.

If your employer applies the old scale

It happens, usually through habit rather than bad faith — the old rule was in place for over forty years. Ask for the calculation in writing showing how the figure was reached. If it reduces your gratuity because you resigned, the reduction has no basis in the current law, and MOHRE is the route for a complaint. Take advice before signing any final settlement that includes a waiver.

Questions

I signed an unlimited contract before 2022. Does the old rule still apply to me?

No. The 1980 law was repealed in full and employers were required to move existing contracts onto the new regime. A settlement calculated now is calculated under the current law, whatever the contract was called when it was signed.

Does my whole service count, including years before 2022?

Yes. The entitlement is calculated across your entire period of continuous service with that employer. The change in the law altered how the gratuity is worked out, not when your service began.

My employer says I forfeit gratuity because I resigned without notice.

Failing to serve notice may make you liable to compensate the employer for the unserved period, and that is a claim they would have to make. It is not a provision of Article 51 and does not cancel your gratuity entitlement. Insist on seeing the two treated as separate lines in the settlement.

Is it different in DIFC or ADGM?

Yes, entirely. Both financial free zones operate their own employment law outside the federal regime, and DIFC uses the DEWS savings scheme rather than an exit calculation. Nothing on this page applies there.

Reviewed 2026-09-19 against Federal Decree-Law No. 33 of 2021. General guidance, not legal advice — see the disclaimer.