Dubai contracts: gratuity, notice and labour law

Nobody pays super on a Dubai salary. What you get instead is an end-of-service gratuity, and the rules for it are stricter and stingier than most Australians assume.

The short version

Private-sector jobs in Dubai run under Federal Decree-Law No. 33 of 2021, the UAE Labour Law. Every contract is now fixed-term [2][3].
After one year of continuous service, expatriate workers earn a gratuity of 21 days' basic pay per year for the first five years, then 30 days per year, capped at two years' pay [1].
It's calculated on basic salary only. Housing and transport allowances don't count, so a "AED 40,000 package" might carry a much smaller gratuity [1].
Notice is 30 to 90 days, probation is capped at six months, and non-competes can't run longer than two years [3][4].
Disputes go to the Ministry of Human Resources and Emiratisation (MOHRE) first, and claims have a time limit [6].

The labour law in five minutes

The current law took effect on 2 February 2022, replacing a law from 1980. It has since been amended, including by Federal Decree-Law No. 20 of 2023 [2]. It covers the private sector, including employers licensed on the "mainland" by Dubai's Department of Economy and Tourism. It doesn't cover government employees or domestic workers, who have their own rules [2].

Two free zones play by different rules. The Dubai International Financial Centre (DIFC) has its own employment law and its own workplace savings scheme, known as DEWS, in place of the standard gratuity. If your offer letter says DIFC, read up on that scheme rather than relying on this guide's numbers. Most other free zones follow the federal Labour Law on gratuity.

Contracts are fixed-term

The old "unlimited" contract is gone. Every contract now has an end date, and it can be renewed for a similar or shorter term [2][3]. If the contract expires and you both keep going as normal, it's treated as renewed on the same terms. Renewals count towards your gratuity [3].

The contract that matters is the one registered with MOHRE, not just your offer letter. Check that the salary, especially the basic salary, matches what you agreed.

Probation

Probation can't exceed six months and can't be extended [3]. The notice rules during probation are specific [3][7]:

Who ends it during probation	Minimum written notice
Employer	14 days
You, to join another UAE employer	One month
You, to leave the UAE	14 days

If you leave during probation for another UAE job, the new employer owes your old employer recruitment costs unless agreed otherwise. You don't pay them [3][7]. The same applies if you leave the country and come back on a new work permit within three months [3].

Resigning during probation without serving notice is a risk. It can lead to a one-year ban on getting a new work permit, unless your employer was in breach [4][7].

Notice after probation

Either side can end the contract with written notice of 30 to 90 days [4]. Your contract sets the exact figure within that range. You're paid in full during notice. Whoever skips notice owes the other side pay in lieu, based on the last wage, and both sides can agree to shorten it [4].

If your employer ends the contract, you're entitled to one unpaid day a week during notice to look for work, with three days' warning [4].

Annual leave and sick leave

After a year, you get 30 days' paid annual leave. Between six months and a year, it accrues at two days a month [5]. Unused leave is paid out when you leave, calculated on basic salary [5]. That's a bit more than the four weeks most Australians get.

Sick leave is up to 90 days a year after probation: 15 days on full pay, 30 days on half pay and 45 unpaid [5]. There's no paid sick leave during probation [5]. Parents get five working days of paid parental leave, which is very short by Australian standards [5].

How the gratuity is calculated

The gratuity is the Gulf's answer to super, except it's paid as a lump sum when you leave and it isn't invested along the way. The rules for expatriate workers are [1]:

Under one year: nothing.
Years one to five: 21 days' basic pay for each year.
Each year after five: 30 days' basic pay.
Part years: paid pro rata once you've passed one year.
Unpaid absence: doesn't count as service.
Cap: the total can't exceed two years' pay.
Payment: with your other final dues, within 14 days of the contract ending.

Your employer can deduct money you owe them from the gratuity [1]. Part-time workers get a pro-rata share based on their hours [1].

What it looks like in practice

Twenty-one days is roughly 0.7 of a month's basic pay. Thirty days is roughly a month. In round numbers:

Years of service	Days of basic pay	Roughly, in months of basic pay
Under 1	0	Nothing
1	21	0.7
3	63	2.1
5	105	3.5
8	195	6.5
10	255	8.5

Now the catch. The formula uses basic salary only, not housing, transport or other allowances [1]. Dubai packages often put a large share of the pay into allowances, so basic can be well under the headline figure. Compare that with Australia's Superannuation Guarantee, which is paid on ordinary time earnings, allowances included in many cases. After three years in Dubai, many Australians end up with a gratuity worth a few months of basic pay, and nothing else for retirement.

The voluntary Savings Scheme

MOHRE also runs a voluntary alternative. Employers who opt in pay monthly contributions into approved investment funds instead of building up a gratuity: 5.83% of basic salary a month for staff with under five years' service and 8.33% after five years [1]. You can add up to 25% of your total wage yourself. Choices include capital-guaranteed, risk-based and Sharia-compliant funds, and you're paid the balance plus returns within 14 days of leaving [1]. It applies across the private sector, including free zones, but only if your employer signs up [1]. Ask in the interview.

Non-competes, passports and bans

Non-compete clauses are allowed but must be limited to what protects a legitimate business interest. They must specify time, place and type of work, and they can't run for more than two years after the contract ends [3].

Your passport is yours. Smartraveller notes that employers may ask to hold staff passports, and says this is illegal but not unusual [8]. Don't hand it over.

Disputes can stop you leaving. Smartraveller warns that UAE authorities can hold passports and stop people leaving during disputes, and that Australians are often caught up in disputes where firms or courts have taken their passport [8]. Settle things properly before your last day.

Making a claim with MOHRE

If your employer doesn't pay your final dues, gratuity or notice pay, MOHRE is the first stop. Smartraveller points to it as the department that can review and help settle employment claims [8].

Gather your papers: your MOHRE contract, payslips, bank statements showing salary payments, and any written notice.
File the complaint on the MOHRE website or the MoHRE app. The Labour Claims and Advisory Call Centre is on 80084 (toll-free) [6].
Try for a settlement. MOHRE examines the complaint and tries to settle it amicably [6].
Get a decision or a referral. MOHRE can issue a final decision on claims under AED 50,000. Bigger or unresolved claims are referred to the labour court [6].
Register with the court within 14 days if you're referred. Court fees are waived for workers on claims under AED 100,000 [6].
Don't wait. The government portal says a claim won't be heard more than one year after the breach [6].

If you're dismissed for making a valid complaint or lawsuit, that's arbitrary dismissal. Compensation is capped at three months' pay, on top of your gratuity and notice pay [4].

The Australian angle

No super, no Super Guarantee. Your UAE employer doesn't contribute to an Australian fund. You can still make personal contributions, within the rules. See super while living overseas.
No social security agreement. Australia doesn't have one with the UAE, so years in Dubai don't count towards the Age Pension residence test.
No income tax treaty. Australia has no comprehensive income tax treaty with the UAE. Whether the ATO taxes your salary and gratuity depends on your residency. We cover that in a tax-free salary in Dubai and your Australian tax.
Fair Work doesn't apply. There's no unfair dismissal regime like Australia's. Read the contract before you sign, because changing it later is hard.

Comparing offers or wondering if a gratuity figure looks right? Ask in Cooee UAE, our Facebook group for Australians in the UAE.

Your Dubai contract: gratuity, notice and the labour law that replaces super