What is salary in lieu of notice in the UAE and how is it calculated?

Salary in lieu of notice — also called payment in lieu of notice — is money paid instead of making you work through your notice period. Under UAE Labour Law (Federal Decree-Law No. 33 of 2021) either party can end a contract with written notice, normally between thirty and ninety days as fixed in your contract. The side ending the contract can choose to pay for that period rather than have it worked. So if your employer tells you not to come back tomorrow, it must pay you the wage you would have earned across the notice period, or across the portion you did not serve. The figure is based on the wage as defined in your contract for those notice days. In principle that means what you would actually have been paid for the period, not a stripped-down number. Check what your own contract defines as the wage, because that definition drives the calculation. The arithmetic itself is simple: notice days not served, multiplied by the daily wage figure your contract points to. You generally cannot insist on physically serving your notice once the employer has chosen to pay in lieu — that choice belongs to the side ending the contract. The rule also runs in reverse. A worker who resigns and leaves without serving the agreed notice may owe the employer compensation for the un-served days. Notice pay is separate from, and additional to, the rest of your final settlement. You should still receive any unpaid wages, payment for accrued unused annual leave, end-of-service gratuity if you qualify, and any contractual benefits owed on termination. If you were dismissed with no notice at all and the termination was not based on the narrow grounds that legally permit dismissal without notice, compensation in lieu of notice is generally owed on top of those entitlements. Where the dismissal was also for an invalid reason it may amount to arbitrary dismissal, which can add court-assessed compensation of up to three months' wage. The exception is genuine summary dismissal for specified serious misconduct, where no notice pay is due — but the employer has to prove those grounds. Before you sign anything, check the numbers. Confirm the number of notice days used, the wage figure applied to them, and that the settlement itemises gratuity and leave separately from the notice payment. Keep your contract, your payslips and any termination letter, since those are what prove the figure. Your visa cancellation and grace period then follow the usual process. If notice pay is missing or the amount looks short, you can file a complaint with MOHRE, which attempts settlement first. You can also compare verified UAE legal professionals on LEXAI and have a licensed lawyer check the final settlement is complete before you sign it.