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The DIFC scrapped end-of-service gratuity in 2020 and replaced it with a funded savings plan. Here is what that means for your money.
Before February 2020, DIFC employees received an end-of-service gratuity much like the rest of the UAE: a lump sum calculated on final salary and length of service, paid when they left. The problem with that model is that it is an unfunded promise — the money sits on the employer's balance sheet until the day it is owed, and if the employer fails, the employee is an unsecured creditor.
The DIFC Employment Law No. 2 of 2019 replaced it with DEWS — the DIFC Employee Workplace Savings plan. Employers now make monthly contributions into a trust-based, professionally managed plan held entirely outside the company.
| Length of service | Monthly employer contribution |
|---|---|
| First 5 years | 5.83% of monthly basic salary |
| After 5 years | 8.33% of monthly basic salary |
Those percentages are not arbitrary. They are the old gratuity formula expressed as a monthly rate: 21 days a year is 21 ÷ 360 = 5.83%, and 30 days a year is 30 ÷ 360 = 8.33%. The intent was to reproduce the same economic value, just funded as you go.
You can also make voluntary employee contributions on top, which is what turns DEWS from a severance substitute into an actual savings vehicle.
For a long-serving employee whose salary rose steeply, the old gratuity model could well have paid more. For most others — and for anyone whose employer might fail — DEWS is materially safer.
Service accrued before the switch did not disappear. Employers had to deal with the pre-2020 period in one of two ways: either pay the accrued gratuity as a lump sum into DEWS, or keep a record of the accrued entitlement to be paid on termination based on the old formula and the employee's salary at the transfer date.
If you joined a DIFC employer before February 2020, ask specifically how your pre-2020 service was treated — it is a separate pot from your ongoing DEWS contributions and it is easy to overlook in a final settlement.
DEWS covers the end-of-service benefit only. The rest of your final settlement is unchanged and still owed separately:
ADGM in Abu Dhabi runs a broadly similar workplace savings regime. If you work in ADGM, check its own rules rather than assuming either the DIFC or federal position applies.
Not as a traditional lump sum. Since 1 February 2020, DIFC employers contribute monthly to the DEWS workplace savings plan instead. The end-of-service benefit is the accumulated value of that account.
5.83% of monthly basic salary for the first five years of service, rising to 8.33% after five years. Those figures mirror the old 21-day and 30-day gratuity formulas expressed monthly.
For most employees yes, because it accrues from day one, is protected from employer insolvency and is invested. The trade-off is that it is funded on your salary as you earn it rather than your final salary, so a late large promotion is worth less than it would have been under the old system.
It was either paid into DEWS as a lump sum or recorded as an accrued entitlement calculated on the old formula and your salary at the transfer date. Ask your employer specifically, as it is a separate pot from your ongoing contributions.
Generally when you leave DIFC employment. It is a workplace savings plan rather than an instant-access account, though voluntary contributions may have different terms.
No. ADGM in Abu Dhabi has its own workplace savings regime with its own rules. Do not assume the DIFC position applies there.