How to Calculate UAE Pay in Lieu of Notice
October 23, 2026
Pay in lieu of notice lets either party end employment immediately by paying for the notice period instead of working through it: Pay in Lieu = Daily Basic Wage × Notice Days Not Worked, following the same daily-wage structure used elsewhere in UAE settlement calculations.
Skip the math and get your answer instantly:
Open the UAE Notice Period Pay Calculator →Worked Example
AED 10,500 monthly basic salary, 60-day contractual notice period, employer opts to pay in lieu of the full notice rather than have the employee work it.
- Daily basic wage: 10,500 ÷ 30 = AED 350
- Pay in lieu: 60 × 350 = AED 21,000
Who Can Choose This Option
Either the employer or the employee can propose paying in lieu of notice, but it generally requires the other party's agreement — it isn't automatically available unilaterally unless the contract specifically provides for it.
Frequently Asked Questions
What's the formula for UAE pay in lieu of notice?
Daily basic wage multiplied by the number of notice days not worked.
What's the pay in lieu for a 60-day notice period at AED 10,500 basic salary?
AED 21,000 (60 days × AED 350 daily wage).
Can an employee unilaterally choose to pay in lieu instead of working notice?
Generally this requires agreement from the other party, unless the specific contract already provides for it.
Does pay in lieu use basic salary or full salary?
Basic salary, consistent with the daily wage calculation used across UAE notice and gratuity calculations.