UAE Leave Salary Calculation 2025: Complete Guide

Knowing how to do UAE leave salary Calculation isn’t just useful—it protects your rights. In the UAE, full-time employees, part-timers, or contract workers have the right to get paid annual leave. Many UAE workers get confused about how much paid annual leave they will get and when they should receive it, or what happens if they leave the job with unused leave days.

This guide explains it all—in simple words, with real examples, and official UAE labor law references. It’s written for employees, HR officers, and employers alike—so you can calculate leave salary accurately, avoid disputes, and stay compliant.

What Is Leave Salary in the UAE?

Leave salary is the paid amount an employee receives when taking annual leave. It’s a legal right under Article 29 of Federal Decree Law No. 33 of 2021 and applies to both public and private sector workers in the UAE.

When you take your earned annual leave, your employer must pay your basic wage, plus any regular allowances (like housing or transport, if agreed in the contract), before the leave begins.

Leave salary may also be paid out:

If you resign or get terminated with unused leave.
If you’re entitled to encashment instead of taking time off.
If you carry forward leave from a previous year (up to a legal limit).

Source: UAE Labor Law – Article 29

Who Is Eligible?

According to UAE labor law, if you work for the same company for at least 6 months without a break, you have the right to get paid days off each year. This rule is written in Article 29 of UAE Law No. 33 of 2021. If you’ve worked more than 6 months but not a full year, you can get 2 paid days off for every month you worked.

If you have worked more than 6 months but less than a year, you get 2 paid leave days for each month worked.
If you have worked for a year or more. Then you will receive 30 calendar days of fully paid annual leave each year.
Even if you leave your job before completing a full year, you’re still entitled to a pro-rata leave salary based on your months you worked.

How to Calculate Leave Salary in UAE

When you take your earned annual leave or leave the job with unused leave days, your employer must pay you leave salary. This is a legal right under Article 29(6, 9) of the UAE Labour Law.

Let’s break down how the UAE leave salary calculation works.

Basic Formula for Leave Salary

Leave salary is calculated only on the amount of your basic monthly salary, do not include your full gross salary when you are calculating the leave salary. Follow the formula below for calculating your leave salary.

Daily wage = Basic salary ÷ 30
Leave salary = Daily wage × Number of unused leave days.

Example

Suppose your basic salary is AED 3,000/month, then your salary leave would be

First calculate daily wage = 3,000 ÷ 30 = AED 100
If you have 30 unused leave days, then:
Leave salary = 100 × 30 = AED 3,000

If your basic is AED 5,000 and you worked for 7 months, which is less than 1 year:

You’re entitled to 2 days/month × 7 = 14 days Leave Salary
Daily wage = 5,000 ÷ 30 = AED 166.67
Leave salary = 166.67 × 14 = AED 2,333.38

Note: You can also use our UAE gratuity calculator to estimate your end-of-service benefits.

Leave Salary Encashment Rules

In the UAE, you can also receive cash in exchange for your unused paid leave, but you have to fulfill certain legal conditions. These are based on (Article 29) of Federal Decree Law No. 33 of 2021 and its implementing regulations.

Below is what employers and employees must know about encashing annual leave.

When You Can Encash Leave?

You can claim leave salary only if:

Your contract ends (resignation, termination, non-renewal)
You don’t take your full leave, and the balance is due
You carry over unused leave (with employer approval) and choose to encash it later

Encashment is always calculated based on basic salary, not gross.

Carry Forward Rules

By default, unused leave must be taken within the same year
If not used, it can be carried forward for up to 2 years
The employer must approve in writing for carry forward or encashment
You can carry forward a maximum of 15 days, unless employer agrees to more

MoHRE states that annual leave cannot be denied for more than 2 years unless the worker requests to delay it or encash it.

Penalties for Non-Payment

If a company doesn’t pay leave salary on time, refuses to pay for unused leave after the job ends, or makes someone take unpaid leave without a good reason, they can get in trouble. This can include fines, complaints, or even being blocked from using MoHRE services. Workers can report these issues using the MoHRE smart app or by calling 80060.

Leave Salary on Termination & Resignation

When a job ends—whether due to resignation or termination— UAE Labour Law ensures that workers are paid for any unused annual leave. This applies no matter how long the person has worked.

Let’s break down how it works:

If You Resign

You’re entitled to leave salary for any unused annual leave days, even if you resign before completing a full year (as long as you’ve worked 6+ months).
The amount is calculated based on your basic salary only.
This also includes pro-rated leave for partial years.

Example:

Basic salary: AED 4,000
Worked: 1 year + 3 months
Unused leave: 10 days
Daily wage = 4,000 ÷ 30 = AED 133.33
Leave salary = 133.33 × 10 = AED 1,333.30

If You’re Terminated

Termination doesn’t cancel your leave rights. You’re still entitled to:

Pay for any accrued but unused leave.
Pro-rated salary for partial months worked.

If you’re terminated before using your leave, the employer must pay the cash value—no exceptions, unless the leave was previously encashed or taken.

Leave Salary for Part-Time Employees

In the UAE, part-time workers also have the right to get paid annual leave. But instead of getting a full 30 days like full-time employees, their leave is calculated based on how many hours they’ve worked. So, if you work part-time, freelance, or on a short-term job, you’ll still get paid leave—but only for the time you’ve actually worked. This is usually written in your job contract.

How Is It Calculated?

Let’s say the full-time equivalent works 48 hours a week, and you work 24 hours:

Basic monthly salary: AED 3,000
You work 24 hours/week (approx. 50% of full-time)
You’ve worked for 1 full year
Leave entitlement = 30 × 0.5 = 15 days
Daily wage = 3,000 ÷ 30 = AED 100
Leave salary = 100 × 15 = AED 1500

Key Notes:

The leave policy for part-time roles must be clearly defined in the employment contract.
Even if you work part-time for multiple employers, each company must honor your leave rights based on your hours with them.

Other Types of Leaves in the UAE

The UAE Labour Law provides several types of paid leave, each backed by official legislation. Below are the legally recognized categories of leave as per Federal Decree Law No. 33 of 2021 and the MoHRE guidelines.

Use these as anchor points in contracts, HR policies, or employee queries.

1. Sick Leave

Law Reference: Article 30

60 calendar days total: 45 days full pay and 15 days half pay.
Can extend with 45 unpaid days (consecutive or separate) if needed.
Includes leave for stillbirths and miscarriages after 6 months of pregnancy.

2. Paternity / Parental Leave

Law Reference: Article 32

5 working days of paid parental leave.
Must be taken within 6 months of child’s birth.
Available to both mother and father.

3. Bereavement Leave

Law Reference: Article 33

5 days for the death of a spouse.
3 days for the death of a parent, child, sibling, grandparent, or grandchild.
Fully paid leave.

4. Study Leave

Law Reference: Article 33

10 days of paid study leave per year.
Available to employees with 2+ years of service.
Must be enrolled in an accredited UAE educational institution.

5. Umrah & Hajj Leave

Law Reference: Not mandatory under labor law, but:

Employers may grant special unpaid leave (typically 15–30 days).
Must be requested in advance.
Subject to employer approval.
Some public and private employers do provide it voluntarily.

Note: All leave types require formal requests and employer approval unless otherwise specified.

Mistakes to Avoid While Doing Leave Calculation

Errors in doing annual leave calculation in uae are one of the top reasons for labor disputes. Whether you’re an employer managing payroll or an employee tracking your benefits, here are the most common mistakes:

Confusing Basic Salary with Gross Salary

Law Says: UAE leave salary calculation must be based on basic salary only, unless the contract or company policy clearly includes allowances.

Not Paying Leave Salary Before Leave Starts

Law Says: Leave salary must be paid before the start of the leave period.

Skipping Leave Settlement on Termination

Law Says: All accrued leave must be paid in cash at termination or resignation, based on Article 29(9).

Not Keeping Written Records

Law Says: Any labor disputes are judged based on formal written contracts and records.

FAQs

Leave salary in the UAE is calculated based on the basic salary only, as per Federal Decree Law No. 33 of 2021, Article 29. Allowances generally do not count unless specified in the contract.

Yes, employees can encash unused annual leave during employment or upon termination. However, employers may set policies on timing, and the maximum carry forward allowed is usually 15 days with a two-year expiry, following MoHRE guidelines.

Employers must pay the leave salary before the employee starts their leave or at the final settlement if employment ends. Delays can lead to penalties under UAE labor law.

No. The UAE does not impose income tax on employment benefits, including leave salary or encashments.

Final Thoughts

Whether you’re a worker trying to understand your end-of-year benefits or an employer managing payroll legally, UAE leave salary calculation rules are clear, but easy to misapply. Everything begins with knowing your rights: annual leave is a paid right, not a favor, and the law sets out how it must be calculated, paid, and carried forward.

Employees should always check if their UAE leave salary calculation is based on basic salary—not gross—and confirm the correct number of accrued days. If you’re part-time, your contract must clearly outline your leave entitlement.

For employers, avoid last-minute calculations or unpaid balances at termination. Automating calculations and aligning contracts with MoHRE law avoids disputes and builds trust.

How to Do UAE Leave Salary Calculation

What Is Leave Salary in the UAE?

Who Is Eligible?