OnlineCalculatorEvery employee in the UAE earns paid annual leave — but most workers don't know how their UAE leave salary is actually calculated. Under Federal Decree-Law No. 33 of 2021, your leave pay includes your basic salary plus housing allowance, not just base pay alone. That distinction alone could mean thousands of dirhams more in your pocket. Many expats only discover this gap when they resign and see a final settlement far below expectations. This guide breaks down the exact formula, your legal entitlements, and how to use an online calculator to verify your numbers before your employer does.
What Is Leave Salary in the UAE?
Leave salary is the wage an employee receives during their annual leave period. It is not a bonus. It is your contractual right under UAE law.
Under the UAE Labour Law (Federal Decree-Law No. 33 of 2021), every private-sector employee is entitled to paid annual leave after completing six months of continuous service. The law mandates that your employer pays this leave salary based on your wage at the time the leave starts.
The key detail most workers miss: leave salary is calculated on your basic salary plus allowances — including housing and transportation — unless your contract states a higher figure. This definition is outlined in Article 17 of the implementing regulations.
How Leave Salary Works in the UAE
Your leave entitlement depends on how long you've worked with your employer. Here's the legal breakdown:
- 6 months to less than 1 year of service: 2 days of leave per month (pro-rated)
- 1 year or more of service: 30 calendar days of annual leave per year
Your daily leave salary is calculated using this formula:
Daily Leave Salary = (Basic Salary + Regular Allowances) ÷ 30
For example, if you earn AED 10,000 basic salary and AED 2,500 housing allowance, your monthly leave salary base is AED 12,500. Your daily rate is AED 416.67. For 30 days of annual leave, your full leave salary is AED 12,500.
| Scenario | Basic Salary | Allowances | Daily Rate | 30-Day Leave Pay |
|---|---|---|---|---|
| Junior employee | AED 5,000 | AED 1,500 | AED 216.67 | AED 6,500 |
| Mid-level employee | AED 10,000 | AED 2,500 | AED 416.67 | AED 12,500 |
| Senior employee | AED 25,000 | AED 5,000 | AED 1,000 | AED 30,000 |
Expert insight: Many employers calculate leave salary on basic salary alone, excluding allowances. This is a violation of the law. If your contract bundles all pay into one "total salary" without a separate basic component, the entire amount is treated as basic salary for leave purposes under MOHRE guidelines.
Leave Salary — Key Facts and Figures
The Ministry of Human Resources and Emiratisation (MOHRE) enforces all leave-related rules in the private sector. Here are the official entitlements:
- Annual leave: 30 calendar days per year after 1 year of service
- Leave carry-forward: Employers must grant leave within the year it is due. Employees cannot be forced to forfeit unused leave.
- Leave encashment on termination: Any accrued, unused leave must be paid out at the employee's last drawn wage
- Public holidays during leave: If a UAE public holiday falls during your leave, that day is not counted as a leave day
- Sick leave during annual leave: If an employee falls sick during leave and provides a medical certificate, those sick days are not deducted from annual leave
- Probation period leave: Employees on probation earn leave but typically cannot take it until probation ends. Leave still accrues from day one.
⚠️ NOTE: Many employees confuse calendar days with working days. UAE annual leave is 30 calendar days, which includes weekends. This means your actual time off work is roughly 22 working days, not 30. Getting this wrong inflates your expectations.
Your Contract Type Matters
Whether you're on an unlimited or limited (fixed-term) contract affects your resignation notice period but not your leave entitlement. Under the 2021 law, all private-sector contracts are now fixed-term. Leave rules apply equally.
Basic Salary vs. Total Package
Your basic salary is the most important number. Many UAE employers set basic salary at just 40-60% of the total package. Since leave salary is tied to basic plus regular allowances, a lower basic salary directly reduces your leave pay and gratuity.
Part-Time Employee Leave
Under Federal Decree-Law No. 33 of 2021, part-time workers in the UAE also qualify for annual leave. Their entitlement is pro-rated based on actual working hours specified in the contract.
Leave Salary Timing
Your employer must pay your leave salary before your leave starts. MOHRE requires this. If your employer delays payment, you can file a complaint through the MOHRE app or their website at mohre.gov.ae.
Unpaid Leave Impact
Days spent on unpaid leave are excluded from your service period. This can reduce your annual leave accrual and your end-of-service gratuity calculation if you take extended unpaid leave.
Common Mistakes People Make
1. Accepting leave salary based on basic salary only Your leave pay must include regular allowances such as housing and transport. If your payslip shows leave calculated on basic salary alone, you are being underpaid. Cross-check using a UAE leave salary calculator and raise it with HR.
⚠️ WARNING: This is the most common payroll error in the UAE. It can cost you AED 2,000–5,000 per year depending on your allowances.
2. Not tracking accrued leave days Many employees lose track of how many leave days they've accumulated. When it's time to resign, they accept whatever the employer states. Keep your own records and compare against your pay portal monthly.
3. Assuming unused leave disappears Under UAE law, your employer cannot cancel your unused leave. You are entitled to encashment for every accrued day upon termination. If your employer claims otherwise, file a complaint with MOHRE.
4. Confusing calendar days with working days 30 calendar days of leave includes Saturdays and Sundays. You don't get 30 business days off. Planning a long holiday? Count correctly so you don't return late and face an unauthorised absence penalty.
⚠️ WARNING: Unauthorised absence of 7+ consecutive days can be grounds for termination under Article 44 of the UAE Labour Law.
5. Not requesting leave pay before departure The law requires your employer to pay your leave salary before your leave begins. Don't wait until you return. If payment is delayed, document it and report through MOHRE's official complaint channel.
Practical Tips
Negotiate a higher basic salary at hiring. Since leave salary and gratuity are both tied to basic pay, even a small shift from "allowances" to "basic" boosts both payouts significantly over your employment period.
Use the MOHRE salary calculator for verification. MOHRE provides its own tools and guidelines. Cross-reference any calculation your employer gives you against official resources and a reliable online calculator.
Request your leave balance in writing every quarter. Email HR and ask for a written statement of your accrued leave days. This creates a paper trail that protects you if there's a dispute at resignation.
Plan leave around UAE public holidays. The UAE typically has 10–13 paid public holidays per year. If a public holiday falls during your leave, you get that day back. Strategic planning extends your time off without burning leave days.
Save all payslips showing your allowance breakdown. In a dispute, MOHRE will ask for documentation. The Wage Protection System (WPS) records your salary, but having your own copies ensures you can prove your entitled leave salary.
Consult a UAE labour lawyer for complex cases. If your employer consistently underpays leave salary or refuses encashment, professional advice is worth the investment. Many UAE law firms offer free initial consultations for employment disputes.