Free Zone Gratuity Rules in UAE 2025 – DMCC, JAFZA, DDA & DIFC Guidelines
Free Zone Gratuity Rules in UAE 2025 cover key guidelines for termination payments in major zones such as DMCC, JAFZA, DDA and DIFC.
Introduction
The Free Zone Gratuity Rules UAE 2025 define how end-of-service benefits are managed for employees working in the UAE’s numerous economic free zones. Unlike mainland companies that strictly follow the MOHRE Labour Law, free zones often operate with independent authorities and customized employment frameworks.
Each free zone may interpret labour laws differently, leading to variations in how gratuity, notice periods, or savings plans are applied. Some free zones follow the MOHRE Labour Law UAE 2025, while others, like DIFC and ADGM, implement their own savings-based structures.
Understanding the Free Zone Gratuity Rules UAE 2025 helps both employers and employees ensure accurate settlements and compliance with their respective jurisdiction’s policies.
What Are Free Zone Labour Rules?
The Free Zone Gratuity Rules UAE 2025 exist because every economic zone in the Emirates operates under a specific legal framework. While the federal MOHRE Labour Law UAE 2025 governs mainland employment, most Free Zones function semi-independently through their own regulatory authorities.
In several Free Zones such as DMCC, JAFZA, and DDA, companies still comply with the same provisions set by MOHRE, including end-of-service benefits and contract obligations. On the other hand, areas like DIFC and ADGM follow independent systems that use savings plans or employer contribution models.
To compare mainland and Free Zone settlements, you can use our UAE Gratuity Calculator which aligns with the official MOHRE formula. For verified federal policies, check the MOHRE Labour Law 2025 Reference and for a complete explanation of employee rights, visit the UAE Labour Law 2025 – Complete Guide.
Understanding how each jurisdiction handles gratuity helps employees protect their rights while staying compliant with the Free Zone Gratuity Rules UAE 2025
DMCC Gratuity Rules
The Free Zone Gratuity Rules UAE 2025 for employees working in the Dubai Multi Commodities Centre (DMCC) follow a clear and structured process. DMCC generally aligns with the MOHRE Labour Law when it comes to end-of-service benefits, ensuring that employees receive gratuity based on their years of service and basic salary.
DMCC also allows companies to implement alternative savings plans as part of the employee’s end-of-service package. These plans are designed to help workers accumulate savings over time rather than waiting for a lump-sum payout. However, employers must ensure that any such plan provides benefits equal to or greater than those defined in the Free Zone Gratuity Rules UAE 2025.
In most cases, gratuity within DMCC is calculated using the standard 21-day and 30-day salary formula, similar to mainland companies. The exact amount depends on how long the employee has worked and whether the contract was limited or unlimited. To review this calculation in detail, you can visit the UAE Labour Law 2025 – Complete Guide.
Employees can also use the UAE Gratuity Calculator to estimate their DMCC gratuity based on MOHRE standards and current service duration. This ensures complete transparency and helps both employers and employees comply with the Free Zone Gratuity Rules UAE 2025 effectively.
JAFZA Gratuity Rules
The Free Zone Gratuity Rules UAE 2025 applied in the Jebel Ali Free Zone Authority (JAFZA) follow the same federal MOHRE Labour Law framework. JAFZA calculates end-of-service benefits using the 21-day and 30-day salary formula that governs mainland UAE employment, ensuring fairness and consistency across all private-sector employees.
In JAFZA, gratuity is based on the employee’s final basic salary and total years of continuous service. Any worker completing at least one year becomes eligible for gratuity, while those who resign before completing that period or are dismissed for disciplinary reasons may lose eligibility. The MOHRE Labour Law UAE 2025 formula is strictly followed to keep settlements transparent and compliant.
For a complete walkthrough with examples, visit our dedicated guide How to Calculate JAFZA Gratuity. You can also check the MOHRE Labour Law 2025 Reference for the official federal policy or use the UAE Gratuity Calculator to instantly estimate your end-of-service amount in JAFZA.
Employers are advised to maintain proper documentation and settlement records to ensure compliance with the Free Zone Gratuity Rules UAE 2025. For more insights on general employment obligations, visit the UAE Labour Law 2025 – Complete Guide.
DDA Gratuity Rules
The Free Zone Gratuity Rules UAE 2025 also apply to employees working in the Dubai Development Authority (DDA), which governs several business districts including Internet City, Media City, and Design District. The DDA generally follows the same structure as the MOHRE Labour Law unless a company’s internal policy or employment contract specifies an alternative arrangement.
In most cases, employees in DDA receive gratuity according to the standard MOHRE formula - 21 days of basic salary for each of the first five years of service, and 30 days for every year beyond that. The Free Zone Gratuity Rules UAE 2025 ensure that all settlements are fair, transparent, and based on verified service records.
Employers operating within DDA must issue a full and final settlement letter, calculate gratuity on the employee’s last basic salary, and provide payment within the legally defined timeline. Any delay or underpayment can lead to formal complaints through MOHRE or the respective Free Zone authority.
To better understand the procedure after leaving a job, read our Gratuity After Resignation Guide. You can also use the UAE Gratuity Calculator to verify the amount based on your years of service in DDA. For broader labour compliance, refer to the UAE Labour Law 2025 – Complete Guide.
DIFC and ADGM Exceptions
Among all Free Zones, the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) are unique because they do not follow the traditional gratuity model mentioned in the Free Zone Gratuity Rules UAE 2025. Instead, both operate through a modern contribution-based system known as the Employee Workplace Savings Plan (DEWS).
The DEWS plan replaces the standard end-of-service gratuity with a monthly employer contribution to an employee’s savings account. Employers contribute a fixed percentage of the employee’s basic salary each month, allowing workers to build long-term savings during their employment instead of waiting for a lump-sum payment after resignation or termination.
This contribution-based model aligns with global standards and offers transparency, flexibility, and financial growth potential. Employees in DIFC and ADGM can monitor their DEWS accounts online, making it easier to track accumulated savings throughout their service period.
For comparison, Free Zones like JAFZA and DDA still apply the traditional gratuity formula defined under the MOHRE Labour Law UAE 2025, while DIFC and ADGM follow independent frameworks. To explore both systems side by side, visit the UAE Labour Law 2025 – Complete Guide. You can also use the UAE Gratuity Calculator to check how end-of-service payouts differ from savings-based models under the Free Zone Gratuity Rules UAE 2025.
Gratuity Calculation Example for Free Zone Employees
The Free Zone Gratuity Rules UAE 2025 provide a consistent method to calculate end-of-service benefits, but actual outcomes differ depending on the Free Zone’s regulations. To make it easier to understand, the following examples compare how gratuity is calculated in JAFZA and DMCC using a sample basic salary of AED 12,000 for four years of service.
In JAFZA, which follows the MOHRE Labour Law formula, the employee receives 21 days of basic salary for each year of service during the first five years. The calculation becomes:
21 days × 4 years = 84 days of salary, equal to around 2.8 months.
This means the gratuity will be roughly AED 33,600 (12,000 × 2.8). You can confirm this by visiting our guide on How to Calculate JAFZA Gratuity or using the UAE Gratuity Calculator for instant results.
In DMCC, many companies use an alternative savings-plan model instead of the traditional formula. Employers contribute a fixed percentage of the employee’s monthly salary - often between 8 and 8.3 percent - into a secure fund. For the same AED 12,000 salary over four years, that equals about AED 46,080 in total contributions, not counting investment growth.
Both approaches aim to protect employee rights, but the payout mechanism varies. Workers should always review their contract to confirm which system applies. For deeper insights, refer to the UAE Labour Law 2025 – Complete Guide to understand how these calculations align with the Free Zone Gratuity Rules UAE 2025.
Rights & Responsibilities of Free Zone Employers
The Free Zone Gratuity Rules UAE 2025 outline clear duties for employers operating within zones like DMCC, JAFZA, DDA, DIFC, and ADGM. Each company is responsible for calculating, recording, and paying end-of-service benefits accurately according to the employee’s contract and governing Free Zone regulations.
Employers must issue a final settlement within the legally defined timeline after the employee’s service ends. The payment should include gratuity, pending leave encashment, and any other dues agreed upon in the employment contract. Failure to settle within the set timeframe can result in fines or penalties under Free Zone authority rules or MOHRE’s supervision.
It is also the employer’s duty to maintain clear documentation such as wage records, service certificates, and signed acknowledgements of receipt. These records protect both the company and the employee in case of disputes. The Free Zone Gratuity Rules UAE 2025 encourage transparency by requiring all financial settlements to be processed through traceable methods such as bank transfers.
For step-by-step guidance on the resignation and clearance process, check our Gratuity After Resignation Guide. To confirm compliance with the official laws, refer to the UAE Labour Law 2025 – Complete Guide. You can also calculate final settlements instantly using the UAE Gratuity Calculator.
Frequently Asked Questions on Free Zone Gratuity
Final Summary
The Free Zone Gratuity Rules UAE 2025 give employees in different zones a clear understanding of how their end-of-service benefits are determined. While areas like JAFZA and DDA closely follow the MOHRE Labour Law UAE 2025, others such as DIFC and ADGM use modern savings-based systems like the DEWS Plan.
Employees and employers should always review their contracts carefully and confirm which law applies to their Free Zone. Proper record-keeping and awareness of settlement timelines are essential for smooth clearances.
To calculate your estimated payout instantly, visit the UAE Gratuity Calculator.
For detailed law references, explore:
The Free Zone Gratuity Rules UAE 2025 strengthen transparency and consistency across the UAE, ensuring fair treatment for every worker regardless of where they are employed.