Final settlement Payment timeline: A concise overview

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    The UAE is home to numerous expatriates from many different countries, which supports the success and progress of the country. End-of-service benefits are the responsibility of the employer, and they must be handled and paid in a timely and precise way. Employees in the UAE are subject to a specified set of end-of-service rewards under the country’s labour laws. EOS benefits are provided for the time spent with the organisation after the job contract has ended.

    The previous UAE Labor Law (UAE Federal Law No. 8 of 1980), which will be completely replaced by the New UAE Labor Law Federal Decree Law No. 33 of 2021, has seen several significant changes. On February 2nd, 2022, the New UAE Labor Law went into force.

    How does final settlement work?

    Final settlement calculation is the process used to calculate all of the due amounts for an employee who is leaving, quitting their job, or being let go by the business. It comprises the computation of all obligations that must be paid, such as End of Service Gratuity, Repatriation ticket, Notice period pay, Any unutilized leave i.e. Vacation pay, Unprocessed Salary, Any other benefits or compensation mentioned in the Employment Contract, Any other outstanding payment or deduction, etc.

    Deadline for End of Service payment in UAE:

    According to the new UAE Labor Law Federal Decree-Law No. 33 of 2021, All End of Service Benefits must be paid within 14 days of the employee’s last day of employment. There was no such deadline for End of service entitlement under the prior statute, this extra provision was inserted.

    Frequently Asked Questions

    1. Is there really a timeline for giving the employee their EOS payment?

      Yes, the end-of-service benefit must be paid within 14 days of the end of the employment contract or termination.

    2. Would the employee be entitled to payment of the entire final settlement sum within 14 days or just end-of-service gratuity?

      The company is obligated to pay all entitlements and settle any debts Within 14 days after the employee’s final day of employment.

    3. What different pay components are involved when calculating an employee’s final settlement in the United Arab Emirates?

      1. End of Service Gratuity
      2. Repatriation ticket if applicable
      3. Notice period pay if applicable
      4. Any unutilized leave i.e. Vacation pay
      5. Unprocessed Salary
      6. Any other benefits or compensation mentioned in Employment Contract
      7. Any other outstanding payment or deduction

      For more information about Final Settlement calculation in UAE, please follow the link 

    4. What is End of service Gratuity and who is eligible for this benefit?

      Gratuity is a monetary payment eligible to an employee as a lump sum at the end of his tenure provided that the period of service exceeds one year. For more information about End of service Gratuity in UAE, please follow the link

    5. Is the use of WPS Payment Processing required for EOS?

      WPS is preferred but not necessary for EOS payment. The business can also issue checks. Please visit for more information on WPS in the UAE.

     

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