General FAQs

What is End of Service Benefit (EOSB) and the Alternative EOSB scheme?

What is an end-of-service benefit (EOSB)? An end-of-service benefit, commonly referred to as gratuity, is the final payment an employer makes to an employee when their employment contract ends. It's typically paid as a lump sum after completing at least one year of continuous service. What is the Alternative End-of-Service Benefits Savings Scheme? The Alternative End-of-Service Benefits Savings Scheme is a UAE government initiative, implemented under Cabinet Resolution No. (96) of 2023, offering an alternative to the standard end-of-service gratuity system set out in Federal Decree-Law No. (33) of 2021 on Labour Relations and its Executive Regulations. It is a Ministry of Human Resources and Emiratisation (MOHRE) initiative, approved by the Securities and Commodities Authority (SCA). Under the scheme, participating employers choose which employees to enroll and make a monthly contribution (the Basic Subscription) to an approved investment fund on behalf of each enrolled employee. Instead of a lump-sum gratuity, the employee receives their Basic Subscription balance plus any investment returns at the end of their service — this is legally recognized as their end-of-service benefit.

Is joining the EOSB scheme mandatory or voluntary?

Participation in the scheme works differently depending on whether you're the employer or the employee: - For employers: Enrolling in the scheme is optional. - For employees: Once your employer selects and registers you for the scheme, participation is mandatory for you. Subscription remains optional and voluntary for the following categories, regardless of employer enrollment: - National (UAE) employees of the public and private sectors, as long as their organization or employer continues to make payments toward the prescribed pension and social insurance schemes under applicable legislation.

Does an employer need employee consent to enroll them and make Basic Subscription payments?

No. Enrolling employees in the End of Service Benefit scheme and making Basic Subscription payments on their behalf is solely at the employer's discretion for skilled and unskilled workers — employee consent is not required. An employee does not need to accept their platform invitation for the employer to begin Basic Subscription payments on their behalf. Accepting the invitation is only required if the employee wants to make Voluntary Subscriptions, switch Sub-Funds, or otherwise manage their own investments.

Skilled vs. Unskilled Worker — Definitions

Under the Alternative End-of-Service Benefits Savings Scheme, workers are classified based on monthly salary: - Skilled Worker: an employee earning AED 4,000 or more per month. - Unskilled Worker: an employee earning less than AED 4,000 per month.

What is the Basic Subscription amount?

The Basic Subscription amount is the contribution employers pay every month to implement the alternative system. The calculation for the Basic Subscription amount is as follows: • Employers will pay 5.83% of the basic monthly salary of full-time employees who have been employed for less than five years. • Employers will pay 8.33% of the basic monthly salary of full-time employees who have been employed for more than five years.