How to Calculate Leave Salary in UAE
If you’re working in the United Arab Emirates (UAE), it’s important to understand your rights as an employee, especially when it comes to annual leave salary. Whether you’re planning a vacation or leaving your job, calculating your leave salary accurately ensures you receive the benefits you deserve.
In this guide, we’ll explain how to calculate leave salary in the UAE as per the UAE Labour Law.
📌 What is Leave Salary in UAE?
Leave salary is the payment an employee receives during their annual leave (paid vacation). According to the UAE Labour Law (Federal Decree Law No. 33 of 2021), all employees are entitled to 30 calendar days of paid leave after completing one year of continuous service.
✅ Eligibility for Annual Leave
You are entitled to annual leave based on your service:
- After 1 year of service: 30 calendar days of paid leave
- Between 6 months and 1 year: 2 days per month
- Less than 6 months: No annual leave (only unpaid leave may be granted)
📊 How to Calculate Leave Salary in UAE
Leave salary is calculated based on the employee’s basic salary and allowances (if applicable). Here’s a step-by-step formula:
Step 1: Know Your Daily Salary
First, calculate your daily wage:
Daily Salary = Monthly Basic Salary ÷ 30
Step 2: Multiply by the Number of Leave Days
Once you have your daily salary, multiply it by the number of days of leave:
Leave Salary = Daily Salary × Number of Leave Days
Step 3: Add Allowances (If Included)
Some companies also include housing allowance, transport allowance, etc., in the leave salary. Confirm this with your employer.
🧮 Example Calculation
Let’s say your salary breakdown is:
- Basic Salary: AED 4,000
- Housing Allowance: AED 1,000
- Transport Allowance: AED 500
- Total Monthly Salary: AED 5,500
Step 1: Daily Salary = 4,000 ÷ 30 = AED 133.33
Step 2: Leave Salary for 30 Days = 133.33 × 30 = AED 4,000
If your company includes allowances:
Total Leave Salary = (5,500 ÷ 30) × 30 = AED 5,500
🕒 When Is Leave Salary Paid?
According to UAE law, the employer must pay the leave salary before the start of the leave. If you are leaving the company and have unused leave days, the employer must compensate you in your final settlement.
❗ Important Notes
- Public holidays during your leave period are not counted as leave days.
- If you resign or are terminated, unused leave will be paid in cash.
- Employers may delay leave for up to 2 years, but the leave cannot be forfeited.
Final Thoughts
Knowing how to calculate your leave salary in the UAE empowers you to protect your rights and plan your time off wisely. Always refer to your employment contract and UAE Labour Law for accurate and updated information.
If you have any confusion, you can also approach the MOHRE (Ministry of Human Resources and Emiratisation) for clarification.
