Offboarding well in the United Arab Emirates
Reviewed by Mellow Editorial Team, HR & payroll content team
Offboarding an employee in the UAE means settling every financial and administrative obligation before the person leaves — most critically, calculating and paying end-of-service gratuity correctly and cancelling the work visa in the right sequence.
Calculate the final entitlements first
Before you issue any final payment, work out what the departing employee is owed.
End-of-service gratuity is mandatory for expatriate employees under Federal Decree-Law No. 33/2021. The calculation uses basic wage only — not allowances.
- For the first five years of continuous service: 21 days' basic wage per year.
- For each year beyond five years: 30 days' basic wage per year.
- The total is capped at two years' pay.
An employee who resigns with fewer than one year of service receives no gratuity. Between one and three years, they receive one-third of the entitlement. Between three and five years, two-thirds. After five years, the full amount is due regardless of whether the employee resigned or was terminated — though termination for cause under the Labour Law can affect this, so review the specific circumstances carefully.
Unused annual leave must also be paid out. Employees accrue 30 calendar days of annual leave per year after the first year of service. If there is unused leave at the point of departure, calculate the daily rate on the full salary (not just basic wage) and pay the balance.
Notice period — either work it out or pay in lieu. The employment contract and the Labour Law specify the applicable notice period. If you ask the employee to leave immediately, you owe them the equivalent salary for the full notice period.
Add these three figures together and you have the gross final settlement amount.
Run the final payroll through WPS
All salary payments in the UAE must go through the Wage Protection System. The final settlement payment is no exception. Process it through your WPS-registered payroll system in the same way as a regular monthly salary. If the final month is a partial month, pro-rate accordingly before adding the gratuity and leave payout.
Failure to pay through WPS — or late payment — can trigger Ministry of Human Resources and Emiratisation (MoHRE) compliance penalties, so treat this step with the same urgency as the gratuity calculation itself.
Manage the visa and Emirates ID cancellation
This is where the sequence matters. You cannot simply stop sponsoring someone and walk away. There are specific steps and a defined timeline.
1. Accept the resignation or issue the termination notice in writing. Both parties should sign or acknowledge the document.
2. Complete the final settlement payment before or at the point of visa cancellation where possible. Having an outstanding debt on record when you cancel the visa creates complications for both sides.
3. Submit the visa cancellation through the relevant immigration authority — the General Directorate of Residency and Foreigners Affairs (GDRFA) in Dubai, or the Federal Authority for Identity, Citizenship, Customs and Port Security (ICP) in other emirates. This is done online or through a typing centre.
4. Cancel the Emirates ID — this happens automatically when the residence visa is cancelled in most cases, but confirm with your PRO or document centre.
5. The employee typically has a grace period (commonly 30 days from visa cancellation) to remain in the country, change status, or depart. This can vary, so verify the current grace period at the time of processing.
Retain copies of all cancellation documents. You may need them to respond to any future labour complaint filed through MoHRE.
Handle UAE nationals differently
If the departing employee is a UAE or GCC national enrolled in the GPSSA pension scheme, there is no end-of-service gratuity calculation — they are covered by the pension system instead. Your obligation is to ensure all GPSSA contributions up to the final working day are fully paid and that you notify the authority of the employment end date. Check with GPSSA directly for the deregistration process, as requirements can be updated.
Document everything and settle disputes quickly
MoHRE operates an online labour complaint system that employees can use after they leave the country. A complaint filed months later is much harder to defend if your records are incomplete.
Keep the following on file for a minimum of five years:
- Signed resignation letter or termination notice
- Final settlement calculation, signed by the employee as received
- WPS payment confirmation
- Visa and Emirates ID cancellation confirmation
- Any signed waivers or settlement agreements
If there is a genuine dispute about the gratuity amount or notice period, attempt to resolve it in writing before the visa is cancelled. Once the employee has left the UAE, your leverage to reach an agreed resolution drops considerably — and so does theirs, which often means a formal complaint is the only path they have left.
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