UAE employers — whether UAE nationals or expatriates running businesses — have a defined set of statutory obligations to their employees under Federal Decree-Law No. 33 of 2021 (the UAE Labour Law) and its executive regulations. Failure to comply with these obligations exposes businesses to Ministry of Human Resources and Emiratisation (MOHRE) complaints, civil court claims, and, in severe cases, licence suspension and blacklisting. This guide provides an accurate 2026 overview of the key employee benefit obligations: gratuity, annual leave, health insurance, and other mandatory provisions.
End-of-Service Gratuity in UAE 2026
End-of-service gratuity (also called severance pay or EOSB) is a mandatory payment owed to every UAE private sector employee at the end of their employment — whether they resign, are terminated, or complete a fixed-term contract. The calculation under the UAE Labour Law is: 21 calendar days of basic salary per year of service for the first five years; 30 calendar days per year for each year beyond five years. The maximum gratuity is capped at two years' total remuneration.
Gratuity is calculated on the last drawn basic salary (not the full package including allowances). Employees who resign after less than one year receive no gratuity; after one year and up to three years, they receive one-third of the calculated gratuity; after three to five years, two-thirds; and after five years, the full gratuity. Note that the DEWS scheme (Savings Scheme for Private Sector Employees) applies specifically to DIFC-licensed entities — DIFC companies must contribute to DEWS rather than building an unfunded gratuity liability on the balance sheet.
Annual Leave and Public Holiday Entitlements
Under the UAE Labour Law, employees who have completed one year of service are entitled to a minimum of 30 calendar days of paid annual leave per year. Employees with less than one year but more than six months receive proportionate leave. Annual leave must be taken in the year it is accrued — it can be carried forward with the employer's agreement, but the employer cannot pay in lieu of leave without the employee's consent except at the end of employment.
UAE public holidays are announced by the government annually. Federal public holidays — New Year's Day, National Day, Prophet's Birthday, Eid Al Fitr, Eid Al Adha, and others — apply to all UAE private sector employees. Employees required to work on public holidays are entitled to an additional day off or a premium pay rate as specified in the Labour Law executive regulations. UAE employers must update their leave management systems each year to reflect the announced public holiday dates, which vary due to the Islamic calendar.
Mandatory Health Insurance for UAE Employees
Health insurance is mandatory for all employees in Dubai (under Law No. 11 of 2013) and Abu Dhabi. In Dubai, employers must provide at minimum the Essential Benefits Plan (EBP) to all employees, regardless of salary level. In Abu Dhabi, employers must provide health insurance to all expatriate employees and their dependents. Non-compliance with the mandatory health insurance requirement prevents visa processing and renewal, and is monitored by the DHA and the General Directorate of Residency and Foreigners Affairs.
Employers should confirm that health insurance coverage is maintained continuously — a gap in coverage, even of a few days, can create a compliance breach at visa renewal. Gulf Oasis Insurance Brokers (a sister company of Gulf Oasis Business Management) provides comprehensive health insurance compliance services for UAE employers, ensuring policies are renewed on time and coverage levels are maintained.
Other Statutory Benefits: Maternity Leave, Sick Leave, and End-of-Service Air Ticket
UAE Labour Law 2021 provides for fifty-two calendar days of paid maternity leave for female employees (increased from 45 days under the prior law), plus an additional option of unpaid leave for health-related reasons. Paternity leave of five working days is now also a statutory right for male employees. Sick leave entitlement is 90 days per year after completion of probation — the first 15 days at full pay, the next 30 days at half pay, and the remaining 45 days unpaid.
UAE employment contracts for expatriate employees commonly include an end-of-service air ticket provision — a ticket to the employee's home country on termination. While not a statutory requirement in all cases, this is standard practice and often included in MOHRE-registered contracts. Employers who fail to provide the ticket are subject to complaints and claims. Gulf Oasis Business Management advises UAE employers on all aspects of labour law compliance, including contract drafting, MOHRE registration, and EOSB calculation.