Resignation, Notice Period, and Final Settlement in the UAE

The short answer

Notice period: what the law says

The notice period is set in the employment contract, but under UAE labour law it can't be shorter than 30 days or longer than 90, and it's given in writing. During the notice period the employment relationship continues, so the employee is paid and keeps accruing benefits as normal. You can ask them to work the notice, or agree to release them early — in which case be clear, in writing, about whether the remaining notice is paid. Different, shorter notice rules apply during probation.

The exit sequence

1. Get the resignation in writing and confirm the last working day, counted from the date notice was given.
2. Agree the handover: work in progress, files, accounts, and who covers what.
3. Reconcile attendance and leave: final attendance, unused annual leave, and any unpaid leave taken (which affects service length for gratuity).
4. Calculate the final settlement (below) and get the employee's sign-off on the figures.
5. Pay within 14 days of the contract ending, and make sure the ex-employee is removed from future payroll and WPS runs.
6. Cancel the work permit and residence visa, and issue an experience or end-of-service certificate.
7. Recover company property, disable accounts, and close out their record.

One thing not to do: hold on to an employee's passport or personal documents. Employers must not retain them.

What goes into the final settlement

• Salary up to the last working day, pro-rated for a part month.
• Gratuity, if they've completed at least one year of continuous service. It's calculated on basic salary, and days of unpaid leave don't count towards service. An employee who resigns is entitled to gratuity on the same basis as anyone else. (See how gratuity is calculated.)
• Unused annual leave, paid out on the basis of basic salary. (See annual leave entitlement.)
• Payment in lieu of notice, if that applies under the contract and the circumstances.
• Other contractual dues: bonuses, commissions, and expense reimbursements still owed.
• Less lawful deductions: outstanding loans or advances, or other amounts the employee owes that can lawfully be recovered. Document every deduction.

A worked example

These figures are illustrative, using a 30-day month. Your contract or policy should specify the method:

Gratuity is then added on top, calculated as in our gratuity guide.

The deadline that matters

All amounts owed — final salary, leave payout, and gratuity — must be paid within 14 days of the contract ending. Late payment is exactly the kind of thing employees take to MOHRE, so build the settlement into the notice period rather than starting it on the last day.

Common mistakes

• Ambiguity over the last working day — counted from when, exactly?
• Leave balances nobody can substantiate because the records were scattered.
• Deductions taken from the settlement without documentation or a lawful basis.
• Applying an old gratuity reduction for resignations, which no longer applies under the current law.
• Leaving the ex-employee on the payroll or WPS list.
• Delaying the permit cancellation.

This guide covers standard resignations and end-of-contract exits. Dismissal for cause, arbitrary dismissal, and other early terminations have their own rules — take legal advice before acting on those.

This is a general guide to resignation and final settlement under UAE labour law (Federal Decree-Law No. 33 of 2021) for HR teams doing their own planning — not legal advice for a specific case. Notice, payment, and cancellation rules can change and contracts can add terms; confirm current requirements with MOHRE or a UAE labour lawyer before relying on this page.