Here are 10 key ways your gratuity can now grow like an investment — and what every UAE resident should know:
1. Gratuity turns active investment
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.
2. Monthly payments grow in time
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.
3. 4 trusted funds to grow savings
All contributions go into one of four approved investment funds regulated by the Securities and Commodities Authority (SCA):
Daman Investments End of Service Programme
First Abu Dhabi Bank (FAB) Fund
Lunate Fund
National Bonds Sukuk Fund
These funds manage your money securely while offering flexible growth options tailored to different risk profiles.
4. Options match every risk level
Employees can choose from portfolios designed to fit their comfort level and financial goals:
Capital-guaranteed portfolios: protect savings with no risk to principal, automatically assigned to unskilled workers.
Risk-based investment portfolios: offer higher return potential based on risk appetite.
Sharia-compliant funds: align with Islamic finance principles.
Skilled workers can choose freely among these investment options.
5. Add your own contributions
Employees can grow their savings faster by contributing voluntarily — up to 25% of their total salary each year. These can be made as:
Monthly deductions from wages, or
One-time lump-sum transfers directly to the fund.
Voluntary contributions earn investment returns just like employer payments and can be withdrawn anytime, partially or in full.
6. Guaranteed payouts, flexibility
At the end of employment, employees receive:
100% of employer-paid contributions, and
All investment returns earned during their tenure.
Funds can either be withdrawn immediately or kept invested to continue growing.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.
7. Protection against inflation, risk
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.
8. Lower costs, long-term value
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.
9. Wider eligibility, inclusion
The scheme, initially designed for private-sector workers, has expanded to include:
Self-employed and freelance permit holders.
Non-UAE nationals working in government-linked entities.
UAE nationals in both public and private sectors (alongside pension and social security participation).
10. Strong oversight, easy access
The system is supervised jointly by:
MoHRE, which handles all employment-related complaints, and
SCA, which regulates and inspects investment fund performance.
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.
Takeaway?
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.
Justin is a personal finance author and seasoned business journalist with over a decade of experience. He makes it his mission to break down complex financial topics and make them clear, relatable, and relevant—helping everyday readers navigate today’s economy with confidence.
Before returning to his Middle Eastern roots, where he was born and raised, Justin worked as a Business Correspondent at Reuters, reporting on equities and economic trends across both the Middle East and Asia-Pacific regions.