Can Employers Deduct Gratuity in UAE?

Legal vs Illegal Deductions

| Deduction Type | Legal? | Conditions | |---|---|---| | Unpaid salary | ✅ | Must be itemized with dates | | Employer loans | ✅ | Documented loan agreement | | Proven misconduct fine | ✅ | Up to 50% of gratuity max | | Damaged equipment | ✅ | Proven damage, documented cost | | Absence/abscondence | ⚠️ | Only if severe (unauthorized 10+ days) | | Training bond/contract | ✅ | If in original contract | | Visa/sponsorship costs | ❌ | Employer responsibility | | Uniform/equipment | ❌ | Employer responsibility | | Absence bonus penalty | ❌ | Can't penalize gratuity | | General "damages" | ❌ | Without proof (illegal) | | Performance penalty | ❌ | Can't apply to gratuity |

Your Rights If Deductions Occur

If employer deducts:

1. Request itemized breakdown in writing
2. Ask for evidence of each deduction
3. Cross-check against your records (payslips, loans, etc.)
4. Calculate what you should receive (use our calculator)
5. Compare settlement to your calculation

If discrepancy exists:

1. Email employer with written objection (keep copy)
2. File MOHRE complaint (toll-free: 16000)
3. Provide: contract, settlement letter, payslips, and your calculation
4. MOHRE investigates and directs refund if deduction invalid

Deduction Checklist

Before accepting a settlement with deductions:

• [ ] Each deduction is itemized (amount and reason)
• [ ] Each deduction has supporting evidence (loan agreement, payroll, etc.)
• [ ] Total deductions don't exceed 50% of gratuity
• [ ] Deduction reasons are legal categories (not prohibited)
• [ ] I understand why each deduction is applied
• [ ] Settlement letter shows final gratuity amount clearly

Related Resources

• How to Calculate Gratuity in UAE
• UAE Labour Law 2025: Gratuity Entitlement Breakdown
• Common Errors in Gratuity Calculations
• Top 10 Questions About Gratuity in UAE

For an instant end-of-service estimate, use our online gratuity calculator UAE.

Disclaimer: This reflects MOHRE law as of 2025. For disputes, file MOHRE complaint (16000).