What's Included in a UAE Final Settlement?
October 23, 2026
A UAE final settlement combines four components into one total: end-of-service gratuity, the cash value of unused annual leave, any deduction for a shortfall in the notice period actually served, and any unpaid wages for days already worked. Each has its own calculation; the final settlement is simply all of them added together.
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- Gratuity — the Article 51 end-of-service formula (21/30 days per year, capped at 2 years' wage)
- Unused annual leave — accrued but untaken leave days, paid at basic salary
- Notice shortfall — a deduction if the required notice period wasn't fully served
- Unpaid wages — pay owed for days already worked but not yet paid
Why Treat Them Separately First
Each component uses a different base in some cases (gratuity and leave use basic salary only; unpaid wages typically use the full agreed salary for days actually worked), so calculating them individually before summing avoids applying the wrong salary figure to the wrong component.
Frequently Asked Questions
What are the four components of a UAE final settlement?
Gratuity, unused annual leave payout, a notice-period shortfall deduction (if applicable), and unpaid wages for days already worked.
Do all four components use the same salary base?
No — gratuity and leave payout use basic salary only, while unpaid wages for days worked typically use the full agreed salary.
Is a final settlement always a positive total?
Usually, but a large notice shortfall deduction could reduce it — the components aren't all additions, the notice shortfall is typically subtracted.
Does every exit involve all four components?
Not necessarily — someone who gives full notice and has no unused leave, for example, would have a settlement made up of just gratuity and any final unpaid wages.