OnlineCalculatorAnnual leave salary in the UAE is calculated based on the employee's basic salary — not the total package. Under Federal Decree-Law No. 33 of 2021, every private-sector worker who completes one year of service earns 30 calendar days of paid annual leave. The formula divides the basic monthly salary by 30 to get the daily rate, then multiplies it by the number of leave days owed. One detail most employees miss: allowances like housing and transport are excluded from this calculation unless your contract states otherwise. Understanding this formula can mean the difference between receiving the right payout and losing thousands of dirhams.
What Is Annual Leave Salary in the UAE?
Annual leave salary is the paid compensation an employee receives during their approved vacation days. In the UAE, this right is governed by Federal Decree-Law No. 33 of 2021 (commonly called the UAE Labour Law), enforced by the Ministry of Human Resources and Emiratisation (MOHRE).
Every full-time employee in the UAE's private sector is entitled to paid leave after completing their probation period. During the first year of employment, workers earn 2 days of leave per month worked. After completing one full year, the entitlement jumps to 30 calendar days annually.
This law applies equally to UAE nationals and expatriates working in the private sector. Free zone employees should check their specific free zone authority rules, though most align closely with federal labour law.
How Annual Leave Salary Is Calculated
The calculation uses a straightforward formula. Your basic salary is the starting point — not your gross salary.
Formula:
Daily Rate = Basic Monthly Salary ÷ 30
Leave Salary = Daily Rate × Number of Leave Days
Example: If you earn a basic salary of AED 10,000 per month and take 15 days of annual leave:
- Daily Rate = AED 10,000 ÷ 30 = AED 333.33
- Leave Salary = AED 333.33 × 15 = AED 5,000
Now compare this with an employee earning AED 20,000 basic salary:
| Component | Employee A | Employee B |
|---|---|---|
| Basic Monthly Salary | AED 10,000 | AED 20,000 |
| Daily Rate (÷ 30) | AED 333.33 | AED 666.67 |
| 15-Day Leave Salary | AED 5,000 | AED 10,000 |
| 30-Day Leave Salary | AED 10,000 | AED 20,000 |
Expert insight: Many employment contracts in the UAE split total salary into basic salary (often 60%) and allowances (housing, transport). This split directly affects your leave salary payout. An employee earning a total of AED 15,000 with a basic salary of AED 9,000 will receive leave pay based on AED 9,000 — not AED 15,000. Always check your contract's salary breakdown before calculating.
You can verify your calculation quickly using an online calculator built for UAE-specific salary computations.
Annual Leave Salary — Key Facts and Figures
Under Article 29 of Federal Decree-Law No. 33 of 2021, the following rules apply to annual leave in the UAE's private sector:
- Full entitlement: 30 calendar days per year after completing 12 months of service
- Partial entitlement: 2 days per month during the first year of employment
- Leave encashment: Employees can cash out unused leave upon termination or resignation
- Carry forward: Leave can be carried to the next year only with employer agreement
- Leave during notice period: Annual leave cannot overlap with the notice period unless the employer agrees
- Public holidays within leave: UAE public holidays falling during annual leave are not counted as leave days
⚠️ NOTE: MOHRE clarifies that leave salary must be paid before the employee starts their leave. Employers who delay payment may face penalties under labour law. If your employer refuses to pay leave salary in advance, you can file a complaint through the MOHRE app or call 600 590000.
| Leave Type | Duration | Salary Basis |
|---|---|---|
| Annual Leave | 30 days/year | Basic salary |
| Sick Leave | 90 days/year | Full, half, then unpaid |
| Maternity Leave | 60 days | Full + half pay |
| Parental Leave | 5 working days | Full pay |
Key Factors to Consider
- Contract salary structure matters most. Your leave salary depends on how your employer splits basic salary versus allowances. A higher basic salary percentage means higher leave pay. Review your employment contract and MOHRE-registered salary details carefully.
- Probation period leave accrual. Employees on probation still accrue 2 days per month of leave. However, taking leave during probation requires employer approval. If you resign during probation, you are entitled to encashment for accrued but unused days.
- Part-time employee entitlements differ. Under the 2021 law, part-time workers also receive annual leave, but it is calculated proportionally based on actual working hours compared to a full-time role.
- Free zone rules may vary. Employees in DIFC and ADGM operate under their own employment regulations. DIFC, for example, grants 20 working days of annual leave — not 30 calendar days. Always confirm which jurisdiction governs your contract.
- Leave encashment at termination is mandatory. When an employee resigns or is terminated, the employer must pay out all unused annual leave based on the basic salary at the time of separation. This is separate from end-of-service gratuity.
Common Mistakes People Make
- Calculating leave on gross salary instead of basic salary. This is the most common error. Leave salary is based strictly on basic salary. If your total package is AED 18,000 but basic is AED 10,800, your leave pay uses AED 10,800. Using the gross figure inflates your expectation.
- Assuming leave resets on January 1st. Annual leave in the UAE resets based on your employment anniversary date — not the calendar year. An employee who joined on March 15 has their leave cycle from March to March.
- Not using leave before resignation. Many employees forget they can request to use accrued leave during the notice period (with employer consent). Failing to do so means relying entirely on cash encashment, which may be delayed.
⚠️ WARNING: Some employers calculate encashment using an incorrect daily rate formula (dividing by 22 working days instead of 30 calendar days). Under UAE law, the divisor is 30. Accepting the wrong rate could cost you 27% less than what you are legally owed.
- Ignoring MOHRE-registered salary. The salary registered with MOHRE on your work permit may differ from what your employer actually pays you. Leave salary disputes are settled based on the MOHRE-registered amount unless you can prove a higher contractual salary.
- Carrying leave indefinitely without agreement. UAE law does not automatically let employees stockpile years of unused leave. Employers can require you to take leave or forfeit carried-over days. Always get carry-forward agreements in writing.
Practical Tips
Check your salary certificate from MOHRE. Download your salary details from the MOHRE app or website. This is the official record used in disputes. If it does not match your actual pay, request a correction immediately.
Negotiate a higher basic salary percentage. When signing a new contract, push for at least 60-70% of your total package as basic salary. This directly increases your annual leave pay, sick leave pay, and end-of-service gratuity.
Track your leave balance monthly. Use your company's HR portal or maintain a personal record. Discrepancies are easier to resolve when caught early rather than at the time of resignation.
Request leave salary payment in writing. Send an email to HR before your leave starts, referencing Article 29 of the UAE Labour Law. A written record protects you if payment is delayed.
File disputes promptly through MOHRE. If your employer underpays or refuses leave salary, file a complaint within one year of the violation. MOHRE offers free mediation before cases go to labour court. You can use the MOHRE mobile app or visit a Tasheel service center.
Use an online calculator for quick estimates. Before approaching HR, calculate your exact entitlement independently so you know the correct figure.