The <strong data-start="294" data-end="313">gratuity system is more than just a legal obligation &mdash; it&rsquo;s an integral part of the UAE&rsquo;s labour framework that protects employees&rsquo; rights while encouraging fair and stable employer-employee relationships. Below is an in-depth look at its core purposes:

<h4 data-start="558" data-end="620"><strong data-start="563" data-end="620">1. Providing Financial Security After Employment Ends</h4>
<p data-start="622" data-end="900">One of the main purposes of gratuity is to ensure that employees have <strong data-start="692" data-end="715">a financial cushion after leaving a job. Since the UAE does not have a government-funded unemployment or pension system for private-sector expatriates, gratuity serves as an <strong data-start="870" data-end="899">end-of-service safety net.

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<p data-start="904" data-end="1119"><strong data-start="904" data-end="926">Temporary Support: When an employee&rsquo;s job ends &mdash; due to resignation, termination, or completion of contract &mdash; they may need funds to cover living expenses, job searches, or relocation. Gratuity fills this gap.

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<p data-start="1122" data-end="1363"><strong data-start="1122" data-end="1153">Protection for Expatriates: Most employees in Dubai&rsquo;s private sector are expatriates. They are not eligible for social security benefits like UAE nationals, so gratuity acts as their <strong data-start="1309" data-end="1360">only legally guaranteed post-employment benefit.

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<p data-start="1366" data-end="1554"><strong data-start="1366" data-end="1389">Encourages Savings: Many employees use their gratuity payout to settle debts, fund education, or invest. It indirectly promotes financial discipline and planning for long-term goals.

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<p data-start="1556" data-end="1691">In short, gratuity functions as a <strong data-start="1590" data-end="1619">one-time financial buffer that helps individuals adjust to life after employment or between jobs.

Source: https://gratuitycalculator-uae.net/