The New UAE End-of-Service Savings Scheme

What the End of Service Savings Scheme Changes

Under Cabinet Resolution No. 96 of 2023, issued jointly by MOHRE and the Securities and Commodities Authority, employers can choose to stop accruing gratuity as an unfunded lump-sum promise under Article 51 of Federal Decree-Law No. 33 of 2021, and instead make real monthly contributions into an approved investment fund on your behalf. The traditional system leaves your gratuity sitting as a liability on your employer’s books, paid out only when you actually leave. This scheme funds it in real time instead, into an account that’s actually invested and growing, rather than a number your employer simply owes you later.

How the Contributions Work

If your employer opts into the scheme, they contribute a “basic subscription” every month, calculated as:

• 5.83% of your basic salary for each month during your first 5 years of service
• 8.33% of your basic salary per month from year 6 onward

These are the exact same percentages used in DIFC’s mandatory DEWS scheme, though this is a separate, federal-level system that applies more broadly. On top of your employer’s contribution, you can choose to make additional voluntary contributions of your own, and select how the money is invested, choosing from low, medium, or high-risk investment options, or a Sharia-compliant fund, depending on your own preference.

Is This Mandatory for You?

This is the detail that trips people up. Whether your employer participates at all is entirely the employer’s choice, not yours. But once your employer opts in and selects you as a participating employee, enrollment becomes mandatory for you specifically, you don’t get an individual opt-out once your employer has made that decision. If your employer hasn’t opted in, none of this applies to you, and you remain on the standard lump-sum gratuity system covered elsewhere on this site.

What Happens to Gratuity You Already Earned

If your employer switches you into this scheme partway through your career, the gratuity you’d already accrued under the standard formula up to that changeover date doesn’t disappear or get quietly folded into the new plan. Employers are required to calculate and preserve that pre-enrollment amount separately, based on your basic salary at the time of the switch, so your prior service isn’t erased by moving to the new system.

Who’s Excluded

The scheme applies to non-GCC national private-sector employees, both onshore and within most free zones. It doesn’t apply to UAE or GCC nationals, who are covered by GPSSA pension rules instead. DIFC employees are also excluded, since DIFC already runs its own separate mandatory scheme, DEWS, rather than this federal one. Whether ADGM adopts this specific scheme has been a separate, unsettled question, since ADGM runs its own distinct employment regulations and, since 2025, its own optional savings alternative. If you work in DIFC or ADGM, see our DIFC and ADGM gratuity guide for how those specific frameworks work instead.

When You Get Paid Out

When your employment ends, you’re entitled to everything in your account, your employer’s contributions plus any investment returns they’ve generated, within 14 days of your last working day, the same deadline that applies to standard gratuity. If you’d rather not withdraw immediately, you can generally choose to leave your funds invested even after you’ve left the job.