ADGM end of service: section 61 of the 2024 regulations
Abu Dhabi Global Market kept a gratuity when the DIFC moved to savings, and on the surface it looks like the federal one. Underneath, the ADGM Employment Regulations 2024 change the daily rate, the wage it is applied to, the cap and the deadline.
Which rules apply
ADGM, the financial free zone on Al Maryah and Al Reem islands in Abu Dhabi, has its own employment legislation and its own courts. The ADGM Employment Regulations 2024 came into force on 1 April 2025 and repealed the Employment Regulations 2019. End-of-service gratuity is in section 61. The federal decree-law, and the calculator on this site, do not govern an ADGM employee's gratuity.
Who is entitled
According to the ADGM Registration Authority's guidance on section 61, an employee who completes continuous employment of one year or more is entitled to a gratuity on termination — including part-time and remote employees — "regardless of the reason for termination". The guidance answers the obvious question directly: an employee terminated for cause is still entitled.
Two groups are not entitled:
- Employees with less than one year of continuous employment
- UAE and GCC nationals enrolled in the applicable UAE pension scheme, unless the pension authority has approved in writing that they need not participate and they gave the employer a copy within 30 days of starting
Where an employee works under several successive fixed-term contracts with the same employer, the total period of service counts.
The calculation
| Element | ADGM rule | Federal law, for comparison |
|---|---|---|
| Rate, first five years | 21 days' basic wage a year | 21 days' basic wage a year |
| Rate, after five years | 30 days' basic wage a year | 30 days' basic wage a year |
| Daily rate | Annual basic wage ÷ 365 | Monthly basic wage ÷ 30 |
| Which basic wage | As at the termination date, but never less than 50% of annual wages | Last basic wage, with no floor |
| Part years | Proportionate | Proportionate |
| Ceiling | None | Two years' wage |
| Termination for cause | Still payable | Still payable |
| Payment deadline | 21 calendar days | 14 days |
The 50% floor
This is the most valuable difference. Basic wage for this purpose excludes allowances and variable pay such as bonuses — but for the gratuity calculation only, it cannot be taken as less than half of the employee's annual wages. The Registration Authority's own example: a monthly basic of 2,000 AED in a total of 5,000 is an annual basic of 24,000 against annual wages of 60,000, so the employer must calculate on 30,000 instead. On the mainland, a low basic simply produces a low gratuity.
No cap
The 2019 Regulations capped gratuity at two years' pay. The 2024 Regulations removed it, and the Registration Authority's explanation of section 61 sets out the formula with no ceiling. For most people this changes nothing — under the federal formula the cap bites only after about 25 years and 6 months — but for long-serving ADGM staff it is real money.
A worked example
An analyst at an ADGM-licensed firm, six years' service ending on the anniversary, monthly basic 8,000 AED in a total package of 20,000.
- Apply the floor. Annual basic is 96,000; annual wages are 240,000. Half of 240,000 is 120,000, which is higher, so the calculation uses 120,000.
- Daily rate. 120,000 ÷ 365 = 328.77 AED.
- Days. 5 × 21 + 1 × 30 = 135 days.
- Gratuity. 135 × 328.77 = 44,384 AED.
For comparison, on the same actual basic of 8,000 without the floor, the ADGM figure would be 96,000 ÷ 365 × 135 = 35,507 AED; and the federal calculation on the mainland would be 135 × (8,000 ÷ 30) = 36,000 AED. The floor is worth 8,877 AED here against the unfloored ADGM figure.
Where the floor does not apply, ADGM's daily rate is slightly lower than the federal one: twelve months divided by 365 days gives 0.0329 of a month per day, against 0.0333 on a 30-day month. Over 21 days that is 0.690 of a month's basic in ADGM against 0.700 on the mainland — about 1.4% less.
Opting for a pension or savings scheme
An ADGM employer may offer an employee, in writing, the option of joining a pension or savings scheme as an alternative to the gratuity. If the employee chooses it, the gratuity is not payable unless otherwise agreed. Unlike the DIFC, where contributions to a qualifying scheme are compulsory for eligible staff, in ADGM this is a choice offered to the individual.
Payment and repatriation
- 21 calendar days. On termination, all wages and other amounts owing, including the gratuity but excluding variable payments such as bonuses, must be paid within 21 calendar days of the last day of employment. The guidance's example: a last day of 9 July means payment by 30 July.
- Late payment. The 2024 Regulations attach a late-payment penalty linked to the employee's daily wage for each day of delay, subject to limits and to the court's discretion. Law-firm commentary on the regulations describes a maximum of six months' wages.
- Repatriation flight. Within 30 calendar days of termination, the employer must provide a one-way flight to the employee's country of origin or another agreed country (section 62) — unless the employee is an international remote employee, finds other UAE employment or visa sponsorship within 30 days of the ADGM permit being cancelled, or was terminated for cause.
Notice in ADGM
During probation, which may not exceed six months, either side may end the employment without cause on at least one week's written notice. After probation the minimum notice depends on the contract and the regulations. One difference from the federal law worth knowing: under the 2024 Regulations an employer may not unilaterally make a payment in lieu of notice, though it may place an employee on garden leave.
Disputes
ADGM employment claims go to the ADGM Courts, not to MOHRE. The ADGM Employment Affairs Office publishes the regulations and guidance, and its FAQs repeatedly advise taking independent legal advice for an accurate calculation — which we would echo.
Questions
Is there a cap on ADGM gratuity?
Not under the 2024 Regulations in force since 1 April 2025. The two-year cap in the 2019 Regulations was removed.
Does an ADGM employee lose gratuity if dismissed for cause?
No. The Registration Authority's guidance on section 61 says gratuity is payable regardless of the reason for termination, including termination for cause, once an employee has a year of continuous service.
How long does an ADGM employer have to pay?
21 calendar days from the last day of employment, for wages and all other amounts owing including the gratuity, but not variable payments such as bonuses.
Related
- Free zonesWhich law applies to your employer
- DIFC DEWS explainedThe other financial free zone
- How gratuity is calculatedThe federal method, for comparison
Published 2026-10-18 and reviewed against the ADGM Employment Regulations 2024 and the ADGM Registration Authority’s FAQs of February 2025. General guidance, not legal advice — see the disclaimer.