ADGM Gratuity Rules Explained 2026
Abu Dhabi Global Market operates under its own employment framework — here is how gratuity works · 8 min read ·
ADGM at a glance
ADGM (Abu Dhabi Global Market) operates under its own Employment Regulations, separate from UAE mainland labour law. ADGM employees are entitled to end-of-service gratuity using a formula broadly similar to — but not identical to — the mainland UAE rules.
If you work within the ADGM free zone on Al Maryah Island, Abu Dhabi, your employment is governed by ADGM Employment Regulations 2019 (as amended), not by Federal Decree-Law No. 33 of 2021. This page covers what that means for your gratuity entitlement.
About Abu Dhabi Global Market
The Abu Dhabi Global Market (ADGM) is an international financial centre and free zone established on Al Maryah Island in Abu Dhabi. It operates under a common law framework based on English law and has its own independent legal and regulatory system including its own employment law.
ADGM should not be confused with:
- Mainland UAE — governed by Federal Decree-Law No. 33 of 2021 (MOHRE)
- DIFC — Dubai International Financial Centre, which has replaced traditional gratuity with the DEWS savings scheme (see our DIFC DEWS guide)
- Other free zones — such as JAFZA, DMCC, DAFZA — which mostly follow mainland UAE labour law for gratuity purposes
How ADGM gratuity is calculated
Under ADGM Employment Regulations, end-of-service gratuity is calculated on the employee's basic salary using a day-rate formula similar to the mainland UAE approach:
| Years of continuous service | Gratuity rate |
|---|---|
| Less than 1 year | No entitlement |
| 1 to 5 years | 21 calendar days' basic salary per year |
| More than 5 years | 30 calendar days' basic salary per year (for years beyond 5) |
| Maximum cap | 2 years' total basic salary |
This is structurally identical to the mainland UAE formula. The key difference lies in how “basic salary” is defined in the ADGM context, which employment contract terms govern the calculation, and how disputes are resolved (ADGM Courts rather than MOHRE).
ADGM gratuity calculation — example
Profile: Finance analyst at an ADGM-registered firm, basic salary AED 18,000/month, 7 years of service, resigned
Note: The 2-year cap is AED 18,000 × 24 months = AED 432,000 — well above the calculated amount, so the cap does not apply here.
How ADGM employment law differs from mainland UAE
| Feature | UAE Mainland (MOHRE) | ADGM |
|---|---|---|
| Governing law | Federal Decree-Law No. 33 of 2021 | ADGM Employment Regulations 2019 |
| Dispute resolution | MOHRE mediation → Labour Court | ADGM Courts (common law) |
| Gratuity formula | 21 days (yr 1–5) / 30 days (yr 5+) | Same formula |
| Gratuity basis | Basic salary only | Basic salary (as defined in contract) |
| Maximum cap | 2 years' total basic salary | 2 years' total basic salary |
| Savings scheme | Optional voluntary scheme | ADGM has its own optional savings framework |
| Probation period | Up to 6 months | Up to 6 months (same) |
| Notice period | Min 30 days (graduated by tenure) | Contractual — min 30 days typical |
ADGM gratuity vs DIFC DEWS — which is better?
DIFC replaced traditional gratuity with the DEWS (DIFC Employee Workplace Savings) scheme — a monthly contribution model managed by investment fund operators. ADGM has retained a more traditional gratuity structure, though with a common law contract framework.
ADGM (traditional gratuity)
- Lump-sum payment at end of service
- No monthly employer contributions during employment
- Employee bears credit risk if employer becomes insolvent
- Calculated on basic salary at departure
- Disputes in ADGM Courts (common law process)
DIFC (DEWS scheme)
- Monthly contributions (5.83% yr 1–5 / 8.33% yr 5+)
- Funds held with regulated investment providers
- Portable and protected if employer defaults
- Investment growth potential (and risk)
- Disputes in DIFC Courts
The DEWS model provides better protection against employer insolvency since funds are held separately. ADGM's traditional approach means your gratuity depends on your employer's ability to pay at the time you leave.
What to do if your ADGM employer does not pay gratuity
Unlike mainland UAE where you would file with MOHRE, ADGM disputes are handled through the ADGM Courts — a common law court system operating in English.
- Contact your employer in writing — state the amount owed and give a 14-day deadline to pay
- File a claim with the ADGM Employment Dispute Resolution Authority (EDRA) — this is the first step for employment disputes under AED 250,000
- Escalate to ADGM Courts — if EDRA mediation fails, the matter goes to the ADGM Court of First Instance
- Seek legal advice — ADGM operates under common law and proceedings are in English; legal representation is often worthwhile
Frequently asked questions about ADGM gratuity
My company is based in Abu Dhabi but not in ADGM — which law applies?
If your employer is not registered within the ADGM free zone, mainland UAE federal labour law (Federal Decree-Law No. 33 of 2021) applies, regardless of where in Abu Dhabi the office is located. ADGM jurisdiction is limited to companies registered within the ADGM free zone on Al Maryah Island.
Does ADGM have a minimum wage?
ADGM does not have a specific minimum wage regulation for private sector employees, following a similar approach to the UAE mainland which currently has no universal minimum wage for white-collar private sector workers (though there are sector-specific minimums).
Can I transfer my ADGM gratuity entitlement if I move to a mainland UAE company?
No — gratuity entitlements do not transfer between employers. When you leave your ADGM employer, you receive your full ADGM gratuity payment. When you eventually leave your mainland employer, you start a new gratuity calculation from zero with that employer.
Estimate your ADGM gratuity
The gratuity formula is identical to mainland UAE — use the calculator with your basic salary and service years.
Use the free calculator →