Home / Free Zone Gratuity
Most free zones follow the federal formula. Two do not — and the difference is worth tens of thousands of dirhams.
Last reviewed: · General information, not legal advice
The UAE has more than forty free zones. For end-of-service purposes they fall into two groups:
| Group | Free zones | End of service |
|---|---|---|
| Federal-aligned (the large majority) | JAFZA, DMCC, DAFZA, Dubai South, Dubai Silicon Oasis, SAIF Zone, Hamriyah, RAKEZ, Ajman Free Zone, KIZAD, Masdar City and others | The federal 21/30 day gratuity formula |
| Separate financial free zones | DIFC and ADGM | DIFC: DEWS savings plan instead of gratuity. ADGM: its own gratuity rules (21/30 days' basic wage, capped at two years' wage), or an employer pension alternative |
The distinction exists because DIFC and ADGM are financial free zones established under the UAE Constitution with the power to make their own civil and commercial law. Ordinary free zones are administrative, not legislative — they can set their own procedures but not displace federal employment law.
Your entitlement is the standard calculation:
Where free zones diverge is in administration, and this catches people out when something goes wrong:
Do not rely on the office address — a company in a Dubai tower can be licensed anywhere. Check instead:
If the licence says DIFC, you are in the DEWS savings-scheme regime and the 21/30 day formula does not describe your entitlement. If it says ADGM, the ADGM Employment Regulations 2019 apply: a similar 21/30-day gratuity on basic wage, unless your employer offers an approved pension alternative. Anything else, and the federal formula almost certainly does.
Some free zone employers present their internal employment regulations as though they override the federal law entirely. In general they cannot reduce statutory minimums for employees outside DIFC and ADGM. A free zone rule or contract clause that gives you less than the federal entitlement is on weak ground; one that gives you more is perfectly valid and enforceable.
The same principle applies to contract terms generally — the federal law sets a floor, not a ceiling. An employer may always be more generous.
Yes, in almost all free zones, using the same federal formula of 21 days of basic salary per year for the first five years and 30 days after. The exceptions are DIFC, which replaced gratuity with the DEWS savings plan, and ADGM, which has its own Employment Regulations with a similar 21/30-day gratuity.
Not in the amount. Both follow the federal 21/30 day formula. What differs is administration — contract registration, visa cancellation and dispute handling go through the free zone authority rather than MOHRE.
DIFC. It replaced end-of-service gratuity with the DEWS workplace savings plan in 2020. ADGM, the other financial free zone, still has a gratuity under section 59 of its Employment Regulations 2019 (21 days' basic wage a year for the first five years, 30 after, capped at two years' wage), although employers may offer a pension scheme instead.
Check your employment contract, residence visa or your employer's trade licence — each names the licensing authority. The physical office location is not a reliable guide.
Outside DIFC and ADGM, generally no. Federal entitlements act as a floor. A contract offering more than the statutory minimum is valid; one offering less is on weak ground.
Start with the free zone authority that registered your contract, as they handle disputes in the first instance. If that route fails, the matter can escalate to the courts.
Source: Federal Decree-Law No. 33 of 2021 and its amendments (official MOHRE English translation, PDF). The Arabic text prevails.