UAE Annual Leave Guide · Updated August 2026
UAE Annual Leave Salary: Entitlement, Accrual and Encashment
What you earn, how it builds up month by month, which salary applies to leave you take versus leave you are paid for at the end — and the mistake that costs first-year employees two thirds of their entitlement.
Quick answer
A UAE employee earns 30 calendar days of fully paid annual leave a year after completing one year of service. Where service exceeds six months but is under a year, the entitlement is 2 days for each month of service. Leave salary is the daily wage — the applicable monthly salary ÷ 30 — multiplied by the days. Leave taken is paid on full salary; leave encashed when employment ends is paid on basic salary.
Want the number rather than the method? Our UAE Leave Salary Calculator works out leave pay or encashment from your salary and days.
Key takeaways
- 30 calendar days a year after one year of service.
- Between six and twelve months: 2 days for each month of service — the first six months count.
- Leave taken during employment: full salary including normal allowances.
- Unused leave paid at termination: basic salary.
- Public holidays falling inside a leave period count as part of that leave.
- Carry-forward needs employer consent; it is not an unlimited right to bank leave.
What you are entitled to
| Length of service | Entitlement |
|---|---|
| Less than 6 months | No statutory entitlement |
| More than 6 months, less than 1 year | 2 days of fully paid leave for each month of service |
| 1 year and above | 30 calendar days of fully paid leave per year |
| Final year on exit | Proportionate to the period worked |
| Daily wage basis | Applicable monthly salary ÷ 30 |
The six-month rule is a threshold, not a deduction
This is the single most misunderstood point on the subject, and a surprising number of UAE leave calculators get it wrong.
The UAE Government states that "if the period of service exceeds six months but is less than one year, the employee is entitled to 2 days of leave for each month of service". Each month of service — not each month after the first six.
So an employee leaving after nine months has earned 9 × 2 = 18 days, not 3 × 2 = 6 days.
Six months is the point at which the entitlement becomes payable at all. Once you pass it, the whole period counts. Treating it as a deduction understates a first-year exit by two thirds.
How leave accrues
Leave builds up across the year rather than arriving in a lump on 1 January. After the first year, 30 days a year is equivalent to 2.5 days per month for estimation. On termination, entitlement for the final year is calculated proportionately to the period worked, which is what makes the encashment figure at exit meaningful rather than all-or-nothing.
Which salary applies
There are two different situations and they use two different figures. Getting this wrong in either direction is common.
| Situation | Salary basis |
|---|---|
| Annual leave actually taken during employment | Full monthly salary, including the allowances normally received |
| Unused leave paid out when employment ends | Basic salary |
The second of these is stated directly by the UAE Government: payment for leave accrued on termination is "calculated on the basis of his/her basic salary". The first rests on the reading of Article 29 of Federal Decree-Law No. 33 of 2021, under which annual leave is taken on full pay. If the amount is material to you, check your contract wording and take advice.
The practical consequence: for an employee on AED 8,000 basic plus AED 6,000 of allowances, a month of leave taken is worth AED 14,000, but a month of unused leave encashed at exit is worth AED 8,000. Same days, different figure, because they are different entitlements.
Worked examples
Example 1 — a full year's leave taken
Full salary AED 9,000, 30 days of leave
Daily wage = 9,000 ÷ 30 = AED 300
Leave salary = 300 × 30 = AED 9,000
A full 30-day entitlement is worth one month of salary. That is a useful sanity check on any figure you are given.
Example 2 — nine months of service, then leaving
Basic salary AED 6,000, 9 months of service, no leave taken
Days earned = 9 × 2 = 18 days
Daily wage = 6,000 ÷ 30 = AED 200
Encashment = 18 × 200 = AED 3,600
Encashment at exit uses basic salary. Had this been calculated as 3 months × 2 days, the figure would have been AED 1,200 — AED 2,400 short.
Example 3 — a partial year after several years of service
Basic salary AED 12,000, leaving 7 months into the leave year, 5 days already taken
Accrued = 7 × 2.5 = 17.5 days
Balance = 17.5 − 5 = 12.5 days
Daily wage = 12,000 ÷ 30 = AED 400
Encashment = 12.5 × 400 = AED 5,000
Public holidays inside a leave period
A public holiday taken on its own is a separate paid entitlement. But the UAE Government states that public holidays or agreed leave days falling within the annual leave period are considered part of the annual leave, unless the employment contract or company policies provide more favourable terms.
So booking a block of leave across a public holiday does not extend it by a day — the holiday is absorbed. Some employers do give more favourable treatment as a matter of policy, which is worth checking rather than assuming in either direction.
Carrying leave forward
With the employer's consent, an employee may carry unused annual leave, or part of it, into the following year, or take cash compensation for it instead. Working the other way, an employer cannot prevent an employee from taking accrued leave for more than two consecutive years unless the employee has chosen to carry it over or to be paid for it.
What the law does not create is an unlimited right to bank leave indefinitely. An employee sitting on a large accumulated balance should confirm how much of it the employer actually recognises before counting on it at exit.
Scheduling, notice periods and payment timing
Article 29 is generally read as allowing the employer to schedule annual leave according to work requirements and in agreement with the employee, with advance notification, and as entitling the employee to receive the wage for the leave period before taking it. Many employers instead run leave pay through normal monthly payroll, which is a matter for the contract.
Where leave is scheduled during a notice period, those days come out of the balance before encashment is worked out. An employee expecting a large leave payout at exit should check whether notice-period leave has been applied — it is a common source of surprise in a final settlement.
Where leave calculations usually go wrong
- Counting only the months after the first six. The six-month point is a threshold. Nine months of service is 18 days, not 6.
- Using the same salary figure for both situations. Leave taken uses full salary; leave encashed at exit uses basic.
- Assuming a public holiday extends a booked leave period. Inside an annual-leave period it is absorbed into it.
- Assuming leave banks indefinitely. Carry-forward needs consent, and the law does not support unlimited accumulation.
- Forgetting notice-period leave. Days taken during notice reduce what is encashed.
- Tracking balances in a spreadsheet separate from payroll. The balance and the payslip then disagree, and the disagreement surfaces at exit when it is hardest to resolve.
What this guide does not cover
- Sick leave, maternity, parental, compassionate and study leave, which are separate entitlements with their own rules.
- Part-time and other work models, which are treated differently under the law.
- Free-zone employers operating their own employment regulations, such as DIFC and ADGM.
Run your own numbers → Enter your salary and the number of days, and the calculator shows the daily wage and the total. Use your full salary for leave you are taking, and your basic salary for encashment at exit.
Frequently asked questions
How much annual leave am I entitled to in the UAE?
Thirty calendar days of fully paid annual leave per year once you have completed one year of service. Where service exceeds six months but is less than one year, the entitlement is 2 days of leave for each month of service. Below six months there is no statutory entitlement, though a contract may grant more.
How is leave salary calculated?
Daily wage multiplied by the number of leave days. The daily wage comes from the applicable monthly salary divided by 30. For a salary of AED 9,000 the daily wage is AED 300, so 30 days of leave is worth AED 9,000 — one month of pay.
If I have worked nine months, how many leave days have I earned?
Eighteen. The UAE Government states that where service exceeds six months but is less than one year, the employee is entitled to 2 days of leave for each month of service. Nine months multiplied by two is 18 days. Six months is the eligibility threshold, not a deduction — the first six months still count.
Is leave salary based on basic salary or full salary?
It depends which situation you are in. Leave accrued but not taken when employment ends is paid on basic salary — the UAE Government states this directly. Leave actually taken during employment is generally understood, under Article 29 of Federal Decree-Law No. 33 of 2021, to be paid on the full monthly salary including the allowances normally received.
Is unused annual leave paid out when I leave?
Yes. Annual leave accrued and not taken is paid out when employment ends, calculated on basic salary. This applies however the employment ends, and entitlement for the final year is worked out proportionately to the period worked.
Do public holidays count as part of my annual leave?
If they fall inside an annual-leave period, yes. The UAE Government states that public holidays or agreed leave days falling within the annual leave period are considered part of that annual leave, unless the employment contract or company policies provide more favourable terms. A public holiday taken independently of annual leave is a separate paid entitlement.
Can I carry unused leave into next year?
With the employer's consent you may carry unused annual leave, or part of it, into the following year, or take cash compensation for it instead. Working the other way, an employer cannot prevent an employee from taking accrued leave for more than two consecutive years unless the employee has chosen to carry it over or be paid for it.
Can my employer decide when I take leave?
Article 29 of the current law is generally read as allowing the employer to schedule annual leave according to work requirements and in agreement with the employee, with advance notification. Leave scheduled during a notice period reduces the balance that would otherwise be encashed at the end.
Do I get paid before the leave starts?
Article 29 is generally read as entitling an employee to receive the wage for the leave period before taking it. Many employers instead run leave pay through the normal monthly payroll, which is a matter for the contract.
Estimate for guidance only — this is not legal advice. Entitlements vary by contract and by work model, and the law is amended from time to time. Confirm your position with MOHRE or a qualified adviser before relying on a figure.
Primary source: Federal Decree-Law No. 33 of 2021, summarised by the UAE Government on annual leave. Reviewed August 2026.
Leave balances living in a spreadsheet?
Avance HRMS accrues leave month by month against each employee's own start date, keeps the balance current, and carries it into payroll and the final settlement — so the number on the payslip and the number in the HR file are the same number.