UAE’s new end-of-service savings scheme: 10 ways your gratuity can now grow like an investment

Dubai: The UAE’s Ministry of Human Resources and Emiratisation (MoHRE) recently launched a new way for private-sector employees to make their end-of-service benefits work harder.

The new Savings Scheme turns traditional gratuity into an investment-based system that grows over time. Instead of a one-time payout at the end of employment, monthly contributions go into professionally managed funds that generate returns.

Here are 10 key ways your gratuity can now grow like an investment — and what every UAE resident should know:

The Savings Scheme replaces the traditional end-of-service gratuity with an investment model. Employers contribute monthly to approved funds on behalf of employees, and those amounts are invested. When employment ends, employees receive both the principal and any returns earned during the investment period.

Instead of saving up a lump-sum payout, employers make regular monthly payments into the fund. The contribution rate is set by law:

Payments must reach the investment fund within 15 days of the start of each month.

All contributions go into one of four approved investment funds regulated by the Securities and Commodities Authority (SCA):

These funds manage your money securely while offering flexible growth options tailored to different risk profiles.

Employees can choose from portfolios designed to fit their comfort level and financial goals:

Skilled workers can choose freely among these investment options.

Employees can grow their savings faster by contributing voluntarily — up to 25% of their total salary each year. These can be made as:

Voluntary contributions earn investment returns just like employer payments and can be withdrawn anytime, partially or in full.

At the end of employment, employees receive:

Funds can either be withdrawn immediately or kept invested to continue growing. When changing jobs, employees may keep the same fund or transfer savings to a new one selected by their next employer.

The scheme protects employees against inflation and company insolvency. Since funds are held independently in regulated investment accounts, savings remain secure regardless of an employer’s financial situation. This ensures workers always receive their full entitlements — plus any investment gains — without delay or loss.

Employers benefit from paying predictable monthly contributions based on current salaries rather than larger lump sums at the end of employment. That makes participation more cost-effective in the medium term. The system also enhances a company’s reputation as an employer that supports long-term financial well-being and encourages employee loyalty.

The scheme, initially designed for private-sector workers, has expanded to include:

The system is supervised jointly by:

Authorities in financial free zones oversee local compliance under their jurisdiction. Employees can access and withdraw their funds after employment ends by following standard MoHRE permit cancellation and fund disbursement procedures.

The UAE’s Savings Scheme turns a traditional end-of-service benefit into a long-term, professionally managed savings plan.

Employees gain investment growth, inflation protection, and flexibility to keep or withdraw their funds. Employers gain predictability, reduced costs, and improved retention.

In short, your gratuity can now do more than wait for the end of your service — it can grow like an investment while you continue building your career in the UAE.