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How to calculate leave salary in UAE

How to calculate leave salary in UAE

How to calculate leave salary in UAE

This is not professional financial advice. Consulting a financial advisor about your particular circumstances is best. 

In the UAE, employees are entitled to a 30-day annual leave (AL) if they have worked full-time for a year. The calculation of leave salary depends on the employee’s basic salary, housing allowance, and any other allowances that are applicable in the normal working month

According to the UAE Labour Law, employees are entitled to their full monthly salary (basic salary plus allowances) if they take 30 days of AL after 12 months of employment. 

If an employee terminates their contract and claims annual leave, the leave salary will be calculated using basic salary only. 

If an employee’s service is ended before they have used their annual leave balance, they will get leave for the fraction of the last year of service. 

Common practice is for basic salary to be 60% of the gross salary and for allowances to be 40%. 

On how the salary for such a leave period needs to be calculated, Arimala said: “As per Article 29 (1) of the UAE Labour Law, the employee will be entitled to receive his or her full monthly salary, which is the basic salary plus allowances, if the annual leave of 30 days is taken after 12 months of employment.”

How is paid leave calculated in UAE?

Per Article 29 (1) of the UAE Labour Law, when an employee takes a 30-day annual leave after completing 12 months of employment, they are entitled to receive their full monthly salary, comprising both the basic salary and allowances. The employer will count the remaining six days as normal working days.

This isn’t legal advice. You may want to consult a lawyer about this question. 

According to Article 29 (1) of the UAE Labour Law, employees are entitled to their full monthly salary plus allowances if they take 30 days of annual leave after 12 months of employment. The employer will count the remaining six days as normal working days. 

To calculate the value of unused annual leave, you can:

  1. Divide the basic salary by 30 to get the daily rate of pay
  2. Multiply the daily rate of pay by the number of unused annual leave days 

According to Article 75 of the UAE Labor Law, employers should calculate leave salary based on the period that the employee has been working for the company:

  • If the employee has been working for more than six months, but less than a year, they should receive two days leave for every month
  • After five years of service, employees are entitled to 30 days of basic salary for each year thereafter 

Is salary calculated for 30 days or 31 days in UAE?

Salary calculation in the UAE can be based on a 30-day month or the actual number of days in a month, depending on the company’s payroll policy and the terms of the employment contract. It is essential to clearly outline the salary calculation method in the employment contract to avoid confusion or disputes.

Between 1-3 years: 1/3 of 21 days’ basic salaryBetween 3-5 years: 2/3 of 21 days’ basic salaryMore than five years: full 21 days’ basic salary.

How is public holiday pay calculated in UAE?

Additionally, employees are entitled to a paid leave on public holidays. If an employee is required to work during holidays or leaves, he will be compensated with another rest day or be paid for that day, a wage as he would be paid on a normal day plus an addition of at least 50 per cent on his basic wage

What is the salary during notice period in UAE?

the worker is entitled to his full wage as per the contract, for the notice period. the party who fails to serve the notice period must pay the other a ‘notice period’ allowance, which is equal to the worker’s wage for the full notice period or in proportion to the remaining period

How to calculate leave salary in UAE

Calculating leave salary in the United Arab Emirates (UAE) typically involves considering the employee’s basic salary and the length of service. The UAE labor law provides guidelines for calculating leave salary. Below are the general steps to calculate leave salary:

  1. Understand Leave Entitlement:
    • According to UAE labor law, employees are entitled to annual leave after completing one year of continuous service. The length of annual leave varies based on the employee’s total length of service.
  2. Determine Annual Leave Entitlement:
    • The annual leave entitlement is typically calculated based on the number of days worked in a year. As of my last knowledge update in January 2022, the standard annual leave entitlements are as follows:
      • 2 days per month for those who have served less than 6 months.
      • 30 days per year for those who have served more than 6 months.
  3. Calculate Daily Rate:
    • Determine the daily rate by dividing the monthly salary by the number of working days in a month. The standard practice is to consider 30 days in a month, even if the actual number of working days may be less.
    Example: If the monthly salary is AED 6,000, the daily rate would be AED 6,000 / 30 = AED 200.
  4. Calculate Leave Salary:
    • Multiply the daily rate by the number of leave days taken.
    Example: If an employee is taking 10 days of leave, the leave salary would be AED 200 * 10 = AED 2,000.
  5. Consider Provisions for Partial Years:
    • For employees who have not completed a full year of service, the leave entitlement may be calculated on a pro-rata basis.
    Example: If an employee has worked for 9 months, and the annual leave entitlement is 30 days, the pro-rata leave entitlement would be (9/12) * 30 = 22.5 days.
  6. Review Employment Contract:
    • It’s important to refer to the employment contract or company policies to ensure that the company follows the legal requirements and any additional provisions outlined in the contract.

Keep in mind that employment laws and regulations may change, so it’s advisable to check for any updates or changes in the UAE labor law. Additionally, companies may have their own policies that could affect the calculation of leave salary. If in doubt, it’s recommended to consult with the company’s HR department or seek legal advice.

However, making your workers take unpaid leave as an obligation is crisis management for the bosses which is I believe illegal with respect to labor laws in the UAE. How you make your bosses follow the rules is another matter of course.

There is no unpaid leave as such.

There are annual leaves (paid), emergency leaves (unpaid), sick leaves (paid if medical certificate provided). Some countries have paid casual leaves but not in the UAE. So anything outside of it is unpaid and there is no calculation for it.

Some employers are sending the employees on long unpaid leaves even up to 6 months which has no legal value. Employees can complain to authorities but the employer can state that he doesn’t have enough means to pay.

So it may end up at the termination of an employee. So some people accept long unpaid leaves instead of being terminated.

Does unpaid leave mean the leave which you have not utilized? You will be paid your leave which you have not availed (In lieu of leave) as:

Some companies pay full salaries and will be calculated for 2.5 days per month. As per the labor rules of UAE, the employer must pay 2.5 days per month and it will be calculated upon his basic salary + House Rent Allowance.


How to calculate leave salary in UAE

The daily working hours shall be regulated so that the worker does not work more than five consecutive hours without intervals for rest , meals and prayer , whose total period shall not be less than one hour . Such intervals shall not be included in the working hours.

Gross Salary X 12/365= per day salary. Per day Salary/8=Per hour salary. Overtime amount is =Number of overtime hours X Per hour salary X 1.25.

As stated several times in this website, there is no minimum wage law in the UAE and salary is a negotiated price between you and your prospective employer. … Dubai employers do not give 13th– month cheques or annual increases as is the case in countries where minimum wage laws exist.

Please note that as per UAE labor laws pertaining to leave, the leave of the employee should not be carried forward for more than two years.

This means you can accumulate your leave for two years only. More than two years’ leave won’t be considered and won’t be paid either.

If a UAE national has no high school certificate, his or her salary should be no less than Dh3,000 per month. High school graduates must earn a minimum of Dh4,000 per month and UAE nationals with a college certificate or more must earn a minimum of Dh5,000 per month.

How to calculate leave salary in UAE in 2024

Annual vacations are a hot topic that we listen to regularly. Many have questions about their payment rights.

The labor law in the country violates the provisions of annual vacations and the rights of employees in articles 74 to 81 of Federal Law 8 of 1980.

For each year of service, an employee is entitled to annual leave according to the duration of the service.

Employees have the right to be paid at least two days each month if their employment period is more than six months but less than one year.

If the period of employment is more than one year, the employee is entitled to 30 days a year.

This is a minimum requirement and may include holidays and weekends that are within that period.

An employee in 2020, is entitled to an official UAE holiday with the full wage for the following occasions:

  1. New Year: (1 January 2021)
  2. Eid Al Fitr: (29 Ramadan-3 Shawwal)
  3. Arafat Day: (9 Dhu al Hijjah)
  4. Eid Al Adha: (10-12 Dhu al Hijjah)
  5. Hijri New Year: (23 August)
  6. Commemoration Day: (1 December)
  7. National Day: (2-3 December)

Is the employee entitled to payment instead of leave if his services cease?

Employees are entitled to pay their salary by license if the employment has ended or if they have stopped working after the notice period prescribed by law.

The employee will be entitled to receive salaries for annual vacations he has not taken.

This payment will be calculated based on the wages received at the time the license expires.

At what time should the annual leave salary be paid?

Before taking their annual leave, employees will be paid their full salary, plus pay for vacation days in accordance with the provisions of this law.

When do the holidays begin and for how long?

The employer has the right to determine the beginning of the annual vacation and, when necessary, to divide the vacation into two classes.

The employer may also prohibit the employee from receiving part or all of the annual leave according to work requirements.

However, in this case, if annual vacations are not taken for the following year, the employer will have to pay the employee his salary in addition to the vacation allowance for the day he worked, which is equal to his base salary.

In addition, the employer can only defer annual vacations once in two consecutive years and pay the employee an annual vacation salary at the same time.

Therefore, no employee will be required to work during annual leave more than once for two consecutive years.

Are government holidays excluded from the calculation of annual vacations?

No, the calculation of the annual holiday period will include official holidays specified by law or contract, or sick holidays, that are within the same period of the annual holiday.

How do you write a letter requesting unpaid leave?

Be very short, sweet, and to the point. Your bosses are very busy people who don’t have time to read long letters. So make it something like:

Dear Boss,

I will be unable to work from This Date to That Date because of These Condensed Circumstances (e.g., my novel was accepted for publication and I need to go to Phoenix to sign the contract). I request unpaid leave during these dates.


Your Name.

Be sure to give them this notice several weeks ahead of time, if possible, or just ASAP. And don’t go all out on the details of why you can’t come into work.

Put it in a sentence, or half a sentence, but no more than forty words. You can probably do it in ten if you put your mind to it.


There are several employment laws, but are all of them followed? It is not uncommon to see laws being flouted by many employers on a regular basis. Employee rights including salary, gratuity, leave entitlements, overtime, working conditions, experience certificates are being denied…

Most employers are heavy investors and influential and know that they can get away with it. If an employee decides to fight for his/her basic rights in legal ways, then get ready to spend all your money and time. The process is time-consuming, slow, outdated, unreliable, unfavorable, and costly.

If you mean payment of leave salary it will be paid on (BASIC + DA )/30 * No of Days leave available. But Leave without pay is equal to absent and hence the full salary is deducted on prorata basis(i.e Gross salary for the month).

The outcome in most scenarios will be in favor of the employer.

How to calculate leave salary in UAE
How to calculate leave salary in UAE

How to calculate leave salary in UAE

Please note that the leave salary is calculated on the basis of basic salary plus HRA although, in practice, full salary is dispersed. The calculation is based on the last salary drawn by the employee. This is as per Articles 75 and 78 of UAE labour law.

For every year of service, an employee is entitled to an annual leave based on length of service. Employees are entitled to a minimum of two days paid leave for every month, if their period of emplyment is more than six months but less than a year.

The general formulas to calculate overtime rate for normal days is (Salary/30 days/8 hours) * 1.25 and for weekend (Salary/30 days/8 hours)*1.5. You should further multiple number of OT hours to the respective formula to get OT Amount for normal days and Fridays to add in to Gross Salary for each employee.

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How to calculate leave salary in UAE

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