How does the end of service savings scheme work, and what happens to your gratuity?

It replaces your gratuity with a monthly payment into an investment fund. If your employer joins and selects you, it stops building up Labour Law gratuity for you and instead pays a set share of your basic salary into a fund licensed for the scheme. When you leave, you get those payments plus any investment returns.¹²

Who can be enrolled?

The scheme is voluntary for employers in the private sector, free zones included. Your employer applies to the Ministry of Human Resources and Emiratisation (MOHRE), picks a licensed fund and chooses which groups of workers to enrol.¹

It is not voluntary for you. Once your employer selects you, the scheme is mandatory for you.¹

Ask HR in writing whether you are enrolled, from which date and in which fund.

How much does your employer pay in?

Service is counted from the day you started with the employer, not from the day you joined the scheme. The employer must pay within 15 days of the start of each calendar month. It cannot take the contribution from your wage, and it cannot get it back, except where your job ends within its first year.¹

For other work patterns such as part time, the same rates apply to the monthly basic wage worked out under the Labour Law.¹

For example, on AED 10,000 basic salary your employer pays AED 583 a month in your first five years and AED 833 a month after that. Over three years that is AED 20,988, before returns and fees. The Labour Law gratuity for the same three years would be AED 21,000.¹³ The savings scheme calculator and the comparison tool do the sums for your pay.

What happens to the gratuity you built up before?

Your employer must work out the gratuity you earned before enrolment under the Labour Law, on your basic wage at the time you joined the scheme, and pay it when your job ends.¹ The UAE Government’s page says the employer must “calculate and settle” that earlier gratuity in line with the law.²

Ask for a written statement of your gratuity up to the enrolment date, with the basic wage used.

Can you add your own money?

Yes. You can pay up to 25% of your total wage each month by salary deduction, or the same share of a year’s wage as a lump sum paid straight to the fund. You can change the percentage as often as you like.¹

You can withdraw part or all of your voluntary money and its returns while still employed, under the fund manager’s rules. Voluntary money does not count as part of your end of service entitlement.¹

Where is the money invested?

Every fund must offer three kinds of option:

• a capital guarantee option, which is the only option for unskilled workers
• risk-based portfolios with different levels of risk and expected return
• Sharia-compliant funds.¹

A skilled worker can choose any option. If you choose one without a capital guarantee, you carry any loss on it, but the resolution says those losses do not include the basic subscription amounts your employer paid in. If you do not choose for your voluntary money, it goes to the capital guarantee option.¹ The resolution defines a skilled worker as one in professional levels one to five earning at least AED 4,000 a month.¹

On 10 October 2024 the regulator announced the first licences under the scheme, to National Bonds and Daman Investments.⁴ Its list of end of service savings funds dates both licences 8 October 2024 and also names funds managed by First Abu Dhabi Bank, Lunate Capital, Emirates NBD Bank and ADCB.⁵

Company profiles are on the providers page. Ask your employer for the fund’s offering document before you choose an option.

When do you get the money?

Within 14 days of your job ending you are entitled to all the basic contributions and any returns. If you die, your heirs are paid within 10 working days. You can instead tell the fund manager in writing that you want the money to stay invested, and withdraw it later at any time.¹

The basic contributions cannot be withdrawn before the job ends.¹ Your employer can ask for amounts you legally owe it to be deducted, but only with MOHRE’s approval or under a court ruling.¹

If you move to a new employer, the new employer may take over the contributions.¹

What if your employer stops paying?

The fund manager must warn your employer, then tell MOHRE. After two months MOHRE stops issuing new work permits to the employer. After four months it fines the employer AED 1,000 a month for each worker affected.¹

The contributions already paid cannot be seized in the employer’s insolvency or bankruptcy.¹

Complaints about your employer go to MOHRE. Complaints about the fund manager and other fund service providers go to the securities regulator. In financial free zones the zone’s authority handles them.¹ See how to complain to MOHRE.

The small print

• Articles. Scope is Article 3, employer duties Article 5, contribution rates Article 6, voluntary contributions Article 7, investment options Article 8, payout Article 9, general rules Article 10, supervision Article 11 and late payment Article 12 of Cabinet Resolution No. 96 of 2023. The definition of a skilled worker is in Article 1.¹
• Gratuity comparison. The Labour Law figure in the example is 3 years × 21 days × AED 10,000 ÷ 30, under Articles 51 and 67 of Federal Decree-Law No. 33 of 2021.³
• Regulator. The Securities and Commodities Authority (SCA) licensed the first funds. Its website is now published as the Capital Market Authority.⁴
• Free zones. Financial free zones set their own scheme rules for entities under them.¹ DIFC and ADGM have their own plans. See DEWS and ADGM workplace savings.
• Other workers. Fund managers may also accept the self-employed, expatriates in government entities and some Emirati private sector staff, under the fund’s offering document.¹