DEWS: how end-of-service works for DIFC employees

The DIFC runs its own end-of-service system. Instead of accruing a gratuity lump sum payable at exit, employers in the financial centre make monthly contributions into the DIFC Employee Workplace Savings plan, known as DEWS, under the DIFC Employment Law (Law No. 2 of 2019).

How the contributions work

The employer contributes 5.83% of the employee's monthly basic salary for the first five years of service, then 8.33% from year five onward. Those rates are set to mirror the traditional formula of 21 days' pay per year for the first five years and 30 days thereafter, so the funded amount tracks what a lump-sum gratuity would have built. Contributions are due monthly.

Why it is structured this way

Under the traditional model, gratuity is an unfunded promise sitting on the employer's balance sheet until an employee leaves. DEWS converts that into a funded, invested account that belongs to the employee and is ring-fenced from the employer, so the entitlement is protected even in insolvency. For the employee it is more secure and portable; for the employer it is a predictable monthly cost rather than a back-loaded liability.

The transition point

DEWS took effect on 1 February 2020. Service accrued before that date is still settled as a traditional lump sum based on basic salary at the transition; service from that date forward accrues through DEWS. An employee who joined a DIFC firm before 2020 may therefore have two components at exit.

What this means for budgeting

A DIFC workforce changes the shape of the cost. There is no growing end-of-service liability to carry; the cost is the monthly contribution, recognised as it is paid. When comparing a DIFC offer with a mainland one, the DIFC package funds end-of-service as it goes, while the mainland package accrues it.