There are two different leave salary calculations in the UAE, and mixing them up is the usual cause of confusion. While you are on annual leave you are paid your full salary. When you leave the company, the leave you never took is paid out on basic salary only.
In short
- 30 days of paid annual leave for each year of service, after your first year.
- 2 days a month if you have worked more than six months but less than a year.
- On leave: full salary, allowances included.
- Unused leave paid out when you leave: basic salary ÷ 30 × days.
How much annual leave you earn
| Length of service | Annual leave |
|---|---|
| Less than 6 months | No entitlement yet |
| 6 months to 1 year | 2 days for each month |
| 1 year or more | 30 days for each year, which is 2.5 days a month |
Part-time employees earn leave in proportion to the hours they work. Your contract or company policy can give you more than the legal minimum, never less.
Pay while you are on leave
When you take your annual leave, you receive the salary you would have earned at work: basic salary plus your regular allowances. Nothing is deducted because you are away.
Example: your basic salary is AED 6,000 and your allowances are AED 3,000. For a full month of leave you are paid AED 9,000, exactly as in a working month.
Pay for unused leave when you leave the job
If your employment ends and you still have leave you have earned but not taken, the employer must pay it out. Article 29 says this payment is calculated on the basic wage.
Example: basic salary AED 6,000, 18 days of leave left. 6,000 ÷ 30 × 18 = AED 3,600.
This is why the leave line on a settlement statement can look small next to your monthly pay. The allowances you receive while on leave are not part of the payout.
Working out your balance
Suppose you leave after 2 years and 5 months. You took all 30 days for each of your first two years, and 4 days in the current year.
- Earned in the current year: 5 months × 2.5 days = 12.5 days
- Taken in the current year: 4 days
- Balance to be paid: 8.5 days
- On a basic salary of AED 6,000: 6,000 ÷ 30 × 8.5 = AED 1,700
Keep your own record of leave taken. The leave balance is the line on a final settlement that employees and HR disagree about most often.
Rules worth knowing
- Your employer decides the dates, taking work needs into account and in agreement with you, and should tell you at least a month ahead.
- Leave should be used. You may carry over up to half of your leave to the following year by agreement, or agree to be paid for it. An employer cannot keep you from taking your leave for more than two years.
- Public holidays and weekends inside your leave count as part of it, unless your contract or company policy is more generous.
- Sick leave is separate. It does not come out of your annual leave.
Leave salary and gratuity are different things
Both are paid on basic salary when you leave, and both appear on the same statement, but they are separate entitlements. Leave pay covers days off you earned and did not use. Gratuity rewards your length of service. You can check the gratuity line with our gratuity calculator.
Frequently asked questions
Is leave salary calculated on basic salary or full salary?
While you are on leave you get your full salary. Unused leave paid out at the end of your employment is calculated on basic salary only.
How many days of annual leave do I get in the UAE?
30 days a year once you have completed a year, and 2 days a month if you have worked between six months and a year.
Can I encash my leave while still employed?
Only by agreement with your employer and in line with company policy. The law's default is that leave is taken, not sold.
Do I get paid for unused leave if I resign?
Yes. Leave you have earned and not taken is paid out whether you resign or are terminated.
How is leave calculated for a part year?
In proportion to the time worked. After your first year you earn 2.5 days for each month.