UAE Leave Salary Calculator — Annual Leave Pay & Encashment 2024

Annual leave and leave salary calculations are among the most frequently misunderstood aspects of employment in the UAE. Whether you are planning a vacation, resigning from a job, or calculating your final settlement package, understanding exactly how much you are entitled to — and on what basis it is paid — is essential. This guide explains the complete UAE leave salary framework under Federal Decree-Law No. 33 of 2021, the law that governs all private-sector employment relationships in the country. ## The Legal Framework: Article 29 of the UAE Labour Law The right to annual leave and the formula for calculating leave pay are set out primarily in Article 29 of Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, which replaced the previous Labour Law No. 8 of 1980 with effect from February 2022. The implementing regulations are found in Cabinet Resolution No. 1 of 2022. The law applies uniformly to all private-sector employees across the mainland UAE, covering Dubai, Abu Dhabi, Sharjah, and the other emirates. Free zones like the DIFC and ADGM have their own employment frameworks, though the federal minimum standards generally serve as the floor. ## Annual Leave Entitlement: How Many Days Are You Owed? Your annual leave entitlement in the UAE depends directly on your length of continuous service: Employees with less than 6 months of continuous service have no entitlement to annual leave. This is the threshold at which accrual begins. Employees who have completed between 6 and 12 months of service accrue 2 calendar days of annual leave for each month worked. An employee with exactly 9 months of service, for example, would have accrued 18 calendar days. Employees who have completed one or more full years of service are entitled to 30 calendar days of annual leave per year. For each additional partial year (when employment ends mid-year), the entitlement is calculated on a pro-rata basis — approximately 2.5 calendar days per month of the partial year. These are minimum entitlements under law. Employers may offer more generous leave policies, and many do, particularly at senior levels. However, no employer may offer less than the statutory minimum. ## Calendar Days vs. Working Days: A Critical Distinction A common point of confusion is that UAE annual leave is measured in calendar days, not working days. This means that when you take annual leave, Saturdays, Sundays, and public holidays that fall within the leave period are counted as part of your entitlement. For example, if you take leave from a Monday to the following Sunday, that is 7 calendar days deducted from your leave balance — not 5 working days as would be the case in some other legal systems. This distinction matters significantly when planning how to use your leave balance and when calculating remaining entitlement at the end of service. ## The Critical Difference: Full Wage vs. Basic Salary Only One of the most important and frequently misunderstood aspects of UAE leave salary law is that the basis for payment differs depending on whether you are taking approved leave or receiving a payout on exit. **For approved annual leave taken while still employed:** Your employer must pay your full wage. This means basic salary plus all fixed monthly allowances — typically including housing allowance, transport allowance, food allowance, and any other regular fixed components of your package. The daily full wage rate is calculated by dividing the total monthly package (basic plus fixed allowances) by 30. **For leave encashment upon resignation, termination, or contract expiry:** The payout is calculated on basic salary only. Article 29(9) of the Labour Law is explicit on this point: unused annual leave days are compensated at the basic wage rate, excluding all allowances. This is a significant distinction that employees should understand before calculating their expected final settlement. This difference means that the actual cash value of a day of leave taken during employment is higher than the value of a day encashed in the final settlement — potentially substantially so, depending on the structure of the compensation package. ## How the Daily Leave Rate Is Calculated Regardless of which scenario applies, the daily rate is always computed by dividing the relevant monthly salary figure by 30. The UAE Labour Law uses a standardised 30-day month for all wage calculations, regardless of how many days are actually in the calendar month. For approved leave pay: Daily rate = (Basic Salary + Fixed Allowances) ÷ 30 For encashment on exit: Daily rate = Basic Salary ÷ 30 The resulting daily figure is then multiplied by the number of unused leave days to arrive at the total leave salary payable. ## Leave Pay Must Be Paid Before the Holiday A legally important and practically significant requirement is that the employer must pay the annual leave salary to the employee before the leave begins, not after the employee returns. This is specified in Article 29 of the Labour Law and is a right employees can enforce through MoHRE if it is not respected. In practice, many employers process leave pay as part of the regular monthly payroll cycle, which may mean the leave salary is paid slightly before or at the time of departure. The key point is that the employer cannot delay payment until after the employee returns from leave. ## Leave Encashment in Final Settlement When employment ends for any reason — resignation, employer-initiated termination, contract expiry, or mutual agreement — any unused and accrued annual leave days must be paid out in cash as part of the final settlement. This payout is calculated on basic salary only, as discussed above. The employer must settle all final entitlements, including leave encashment and end-of-service gratuity, within 14 days of the last working day under Article 53 of the Labour Law. Failure to do so entitles the employee to file a complaint with MoHRE. Leave encashment is separate from and in addition to end-of-service gratuity. Both must be paid. It is a common misconception that leave encashment is part of the gratuity calculation — it is not. The two are calculated independently and paid from the same final settlement. ## Carry-Forward and Employer Restrictions UAE Labour Law permits employees to carry forward up to half of their annual leave entitlement to the following year, subject to agreement with the employer. For a 30-day entitlement, this means up to 15 days can be carried forward. Employers may not indefinitely prevent employees from taking their leave. The law restricts employers from compelling employees to work through their entire annual leave entitlement for more than two consecutive years. Any leave that the employer has prevented the employee from taking must be compensated. Employees who voluntarily choose not to take leave are not automatically entitled to compensation for leave foregone in excess of carry-forward limits — the law requires mutual agreement on leave scheduling. ## Part-Time and Flexible Employment Cabinet Resolution No. 1 of 2022 introduced pro-rated leave entitlements for part-time and flexible employees. The full-time annual leave entitlement is multiplied by the ratio of the employee's contracted hours to the standard full-time hours applicable at the company or in the sector. A worker contracted for 20 hours per week in a company where full-time is 48 hours would receive approximately 41.7% of the full-time entitlement — about 12.5 calendar days of annual leave per year. ## Leave Salary for UAE Nationals UAE national employees in the private sector are generally covered by the General Pension and Social Security Authority (GPSSA) pension scheme rather than the end-of-service gratuity framework. However, annual leave entitlement and leave salary calculations apply equally to all employees under the Labour Law regardless of nationality. The distinction between nationals and expatriates affects gratuity, not annual leave rights. ## Reporting Violations to MoHRE If your employer fails to pay leave salary before your leave, refuses to grant approved leave entitlement, or fails to settle leave encashment within 14 days of termination, you have the right to file a complaint with the Ministry of Human Resources and Emiratisation (MoHRE). Complaints can be submitted through the MoHRE app, the Tasheel service centres, or directly at mohre.gov.ae. MoHRE will attempt mediation and, if unsuccessful, refer the matter to the labour court. ## Important Disclaimer This calculator provides estimates based on Federal Decree-Law No. 33 of 2021 and Cabinet Resolution No. 1 of 2022. Results are for guidance and planning purposes only. Actual entitlements may differ based on your specific contract terms, employer policies, free zone regulations, or MoHRE determinations. This tool does not constitute legal or financial advice. For official guidance, consult MoHRE at mohre.gov.ae or a licensed UAE employment lawyer.