Question 1

Am I entitled to any gratuity if I resign before completing a full year?

Accepted Answer

No. Under UAE Labour Law, you must complete a minimum of 12 months of continuous service to qualify for any end-of-service gratuity. If you leave even a few days before your one-year work anniversary, your accrued gratuity balance defaults to zero.

Question 2

Does a company under a Free Zone follow this exact same calculation?

Accepted Answer

Most major free zones (like JAFZA or DMCC) align their financial regulations with the standard UAE Labour Law. However, dynamic financial hubs like the DIFC or ADGM operate under completely independent judicial systems. The DIFC, for instance, uses the DEWS (Workplace Savings Scheme) investment model instead of traditional mainland gratuity calculations.

Question 3

Do unpaid leave days count toward my total years of service?

Accepted Answer

No. While taking official annual leave or sick leave keeps your continuous service clock running, any periods of unpaid leave are legally excluded from your total days worked. Those exact days will be deducted from your final tenure timeline when calculating your gratuity.

Question 4

Is my gratuity payout taxed when I receive it in the UAE?

Accepted Answer

The United Arab Emirates does not levy any personal income tax or capital gains tax on end-of-service payouts. The amount calculated on your final sheet is the exact amount that should arrive in your bank account.

Question 5

Can my employer reduce my gratuity because I resigned voluntarily?

Accepted Answer

Not anymore. Under the modern UAE labor regulations, the old "resignation reduction cuts" have been completely removed. It no longer matters whether you are terminated or choose to resign; as long as you cross the 1-year service mark, you receive 100% of your accrued 21-day entitlement.

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