UAE Gratuity: Resignation vs Termination (Current Rules)
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Under the current law, resignation and termination give you the same gratuity.
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You receive full gratuity either way once you complete one year of service.
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The old rule that reduced gratuity for resignation was abolished on 2 February 2022.
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Employees dismissed for gross misconduct under Article 44 generally still keep their gratuity.
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On death in service, the one-year threshold is waived and dues are paid within 10 days.
Quick answer: Under Federal Decree-Law No. 33 of 2021, resignation and termination are treated identically for gratuity. If you have completed at least one year of service, you receive your full accrued gratuity either way. The old rule that reduced gratuity for resignation was abolished on 2 February 2022.
"Will I lose part of my gratuity if I resign?" is one of the most searched questions in our complete guide to UAE end-of-service gratuity, and most of the internet still gives the old, wrong answer.
The old rule, and why people still fear it
Under the former 1980 law, employees who resigned under an unlimited contract before five years received a reduced gratuity, as little as one-third between one and three years. That reduction is gone, but the memory of it drives a lot of outdated advice. Background is in limited vs unlimited contract gratuity.
The current rule: resignation equals termination
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Resignation: complete one year, get full gratuity on the 21 and 30-day formula.
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Termination with notice: identical entitlement to resignation.
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The formula does not change based on who ended the contract. See the method in how to calculate gratuity in the UAE.
Worked example: resigning after 3 years and 4 months
| Step | Calculation (9,000 AED basic) | Result |
|---|---|---|
| Daily wage | 9,000 / 30 | 300 AED |
| 3 full years | 3 x 21 x 300 | 18,900 AED |
| 4 months pro-rata | (21 / 12) x 4 x 300 | 2,100 AED |
| Total (resign or terminate) | 18,900 + 2,100 | 21,000 AED |
Under the old law this employee would have received a reduced amount for resigning. Under the current law, they receive the full 21,000 AED.
Special cases
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Dismissal for gross misconduct (Article 44): contrary to the old law, employees generally still retain gratuity, provided they meet the one-year threshold. Employers may pursue separate damages, so seek advice if this applies.
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Death in service (Article 15): the one-year threshold does not apply, and dues must be paid to the family within 10 days.
See your exact figure
Use the UAE gratuity calculator. The result is the same whether you resign or are terminated.
FAQ
Do I get full gratuity if I resign in the UAE?
Yes, provided you have completed at least one year of continuous service.
Can I lose gratuity if I am fired for misconduct?
Under the current law, employees dismissed under Article 44 generally keep their gratuity. Courts may rule otherwise in extreme cases, so get legal advice.
What if I have less than one year of service?
No statutory gratuity is due below one year, except in the case of death in service. See UAE gratuity by tenure.
Sources and References
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Federal Decree-Law No. 33 of 2021 (UAE Labour Law), Article 51 on gratuity, Article 44 on dismissal, and Article 15 on death in service
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Ministry of Human Resources and Emiratisation, termination and end-of-service guidance (mohre.gov.ae)
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UAE Government portal, end-of-service gratuity (u.ae)
This article is for general information and does not constitute legal advice. End-of-service entitlements and disputes should be reviewed with a qualified professional or the Ministry of Human Resources and Emiratisation (MoHRE).