Leave Salary Calculation in UAE (2024)

30 days off as leave salary is granted annually following an employment year in the labour law UAE, vide Federal Law o. 33/2021. The labour law of the UAE is amended by amending Federal Law No. 8/1980 and Federal Laws Nos. 24/1981, 15/1985, and 12/1986. The labour law UAE deals with provisions including calculating leave salaries, which are important for both employers and employees.

UAE Leave Salary Law

Leave salary calculations in the United Arab Emirates are far more crucial for employees and employers, as many factors are involved in them. 

• Annual Leave Under UAE Labour Law: Article 29 of Federal Law No. 33/2021 states that employees in the UAE  are entitled to one annual leave to travel to their home country or to see their loved ones. This allows employees to take a break from work obligations to be fresh and come back to work more productively.
• Duration: 30 days of annual leave for a complete year of service. Employees who have completed six months are entitled to two days each month. The employees are entitled to leave for a portion of their last year of service if the employer fires them before they have used up all of their annual balance leave.
• Notice: The employer must give employees enough time in advance—a minimum of a month to plan their time off.
• Flexibility: The employee can carry over unused leave days into the next year if the employer agrees. 
• Monetary award: The law permits an employee to get a monetary benefit for a yearly vacation for a period longer than two years, subject to free will.
• Treatment of Part-time employees: Annual leave for part-time employees is also permitted by law; the length of the leave period depends on the employer’s decision and as per the duration of employee work.

How to Calculate Leave Salary in UAE

Example: Ms. Z has been working for ABC Company in Dubai for three years. The employment contract entitles her to annual leave as per years of service. 

This table breaks down Ms. Z’s basic pay, housing allowance, annual leave entitlement, and how her pay and allowance were calculated—including the daily allowance for the days she worked during her annual leave period.

Also Know: Payroll Services in UAE

What Is the Method to Calculate Leave Salaries Under UAE Labour Laws?

Each employee is entitled to his base salary and, if any, a housing allowance for the days he takes yearly leave. The employer will pay an employee his regular salary plus an allowance for the days he worked, which will be calculated by taking into account his base pay when the employee’s work interests require him to work during all or a portion of his annual leave and if those days of leave are not carried over to the next year. Verify the reputation of your employer before signing any employment contracts. 

The following must be taken as annual leave for each year of service rendered by an employee:

• Employees who work longer than six months but less than a year will be granted two days off per month. 
• Thirty days in one year of service, 
• The employee may take an annual leave of absence equal to the portion of the last year of employment upon termination of employment.

Various Types of Leave in the UAE

There are different types of leave in the UAE as per the specific situation of a worker, as stated below:

Sabbatical Leave: Article 32 of the UAE labour law permits national workers to take sabbatical leave to perform national service. This service is optional for girls but mandatory for boys, lasting from 11 months to three years. To obtain this leave, workers must verify with the appropriate authorities.

Study Leave: Employees from any sector can take study leave for their personal development. To be entitled to this leave, a minimum of two years of complete employment is required. Workers are eligible to appear in exams at UAE-accredited educational institutions for ten working days annually.

Leave with Compassion: Under Article 32 of the Labour Law, on the demise of close relatives, compassion leave is allowed under UAE Labour Law by considering the effects on the emotional and physical health of individuals who are close to the deceased; therefore, employees are allowed to take time off for cremation or burial and grieve. On the death of a grandparent, sibling, child, or spouse, 3  and 5 days off are allowed, respectively. 

Leave for Umrah and Hajj: The law grants 30 days of unpaid leave once in the whole employment period for Hajj, as pilgrimage is one of Islam’s five pillars, and every Muslim must do it at least once in their lives. According to Islamic authorities, Hajj (the pilgrimage to Makkah) is the most important expedition and a suitable excuse to take time off from work in the UAE.

Maternity leave: Births, like funerals, are paradigm-shifting events that impact a parent’s mental and physical health. It’s especially noticeable in women who suffer from many health issues, like hormonal imbalances and depression. This is why the UAE employment regulations include considerable maternity leave:

• Article 30 of the UAE Labour Law provides sixty days off for female workers as maternity leave, full pay initial 45 days, and half pay for 15 days.
• If there are any difficulties during childbirth, an additional 45 days of unpaid leave are provided.
• Similarly, if the baby is unwell or disabled, the employer may provide a paid 30-day leave, with the possibility of extending it for another 30 days without compensation.

Breastfeeding: Women with newborn babies are entitled to extra breaks (1 and 2 daily) for breastfeeding until six months after childbirth.

Parental Leave: The UAE Labour Law introduced a progressive step by enacting parental leave of 5 days, fully paid, effective from the 6th month of the child’s birth, giving it a leadership role for the UAE in the region.

Official Paid Holidays For Employees in UAE

The following official holidays, which will be observed with full pay, are entitled to an employee:

• Islamic New Year
• Gregorian New Year 
• Eid al-Fitr, two days after the end of Ramadan
• Three days of Eid and Waqfa for Al Adha
• The Prophet Mohammed’s birthday one day
• Isra and Al Mi’raj
• National Day

Official Holidays in the UAE for 2024 

• January 1st marks New Year’s Day
• Eid al-Fitr (four days), from Ramadan 29 to Shawwal 3, 1445 AH
• Arafah Day and Eid Al Adha (the Sacrifice Feast) September 9–12, 1445 AH
• Muharram 1st, 1446 AH, Hijri New Year (the Islamic New Year)
• The birthdate of the prophet Mohammed is 12 Rabi’ Awwal, 1446 AH
• December 2 and 3, 2024, are designated as National Days

FAQs

Do UAE National Holidays Not Have an Impact on How Leave Pay Is Computed?

No. Legally required holidays and other days off due to illness should be included in the computation of annual leave and treated as part of it.

What Rights Would the Employee Have During His Yearly Leave?

When taking annual leave, employees are entitled to their base pay as well as, if applicable, their housing allowance during those days.

Who Chooses When the Leave Begins and Ends?

The employer may split the yearly leave into two portions if needed. He is also in charge of deciding when the leave starts. However, if the employee’s work circumstances force him to work during all or part of his annual leave and that leave is not carried over to the next year, his employer will reimburse him for the day’s work in addition to his base pay.

No worker shall ever be required to work during his yearly leave more than twice in two years. Stated differently, the employer may only withhold payment of an employee’s annual leave wages for a maximum of one time every two years.

When Should Earnings for Yearly Leave Be Paid?

The employee will receive full compensation in addition to the salary for the leave days he is eligible to take under the terms of this Act before beginning his yearly leave.

Whether an Employee Entitled to Leave on the Termination of His Job?

Employees are entitled to pay for time missed if their employment is terminated or if they quit after the required notification period. Any annual leave that is not used by the worker will be reimbursed. His pay at the time the leave was due will be used to calculate his payment.

• The commencement date of yearly leave and, if necessary, its division into no more than two periods may be decided by the employer.
• Not more than twice in two years may an employee be requested to work during their yearly leave. Unless stated otherwise, the company can only postpone one worker’s yearly leave.

When Are Annual Leave Earnings Due?

Before taking his annual leave, the employee will receive payment in full in addition to his salary for the leave days that he is legally entitled to.

How Is Sick Leave Pay Calculated in the United Arab Emirates?

Workers have two days to notify their employers of any illnesses or injuries that keep them from working. During the probationary period, no sick leaves are allowed. On completion of three months of continuous service after the expiration of the probation period, the following benefits will be awarded to the employee: 

• Full pay is due after 15 days
• Pay half for the next thirty days
• The next period will be paid in arrears

However, the employee is not entitled to reimbursement for his sick leave if his misconduct directly caused his illness.

Is the Employee Able to Leave While on Sick Leave?

The worker may leave the company while on sick leave and before the 45-day legal notice period has elapsed if a government physician approves the reason for the resignation. In this instance, the employer must give the resigned worker all of his earned income until the conclusion of the aforementioned 45-day period.

Whether a Sick Employee Be Terminated During His Annual Leave?

Termination of employment during the sickness of the employee, while he is on annual leave, is not allowed. If a termination notice is served during such it will be considered null, and void. However, if the worker has used up all of his sick leave and is unable to report back to work, the employer may end the worker’s employment agreement. The employee has a legal right to receive his entire gratuity and end-of-service benefits in certain situations.

It is mandatory to verify the sincerity of your employer before signing any employment contracts. Moreover, when the worker’s leave ends, he won’t be compensated for the days he missed work. The employee’s right to be fired by the employer will not be affected if they fail to report back to work within seven days of the scheduled return date.