When your UAE contract ends, your employer must pay you for any annual leave you earned but did not take. The payment is calculated on your basic salary: the usual method divides the basic wage by 30 to get a day’s pay, then multiplies by your unused days, including leave earned in your final part-year.
Our UAE leave salary calculator does this in seconds. Below is how each part of the figure is worked out.
Your entitlement: 30 days a year, 2 days a month in the first year
Article 29 of Federal Decree-Law No. 33 of 2021 sets annual leave for private-sector employees:
| Length of service | Annual leave |
|---|---|
| Under 6 months | None yet |
| 6 to 12 months | 2 days for each month of service |
| 1 year or more | 30 calendar days a year |
So someone who has worked nine months has earned 18 days, and someone past their first anniversary earns 30 days for every year. The official portal sets this out on its types of leave page.
Unused leave is paid on basic salary
Vendor blogs disagree on this point: some say basic only, others add fixed allowances. The UAE government portal settles it: unused annual leave paid when you leave is calculated on your basic salary, whatever the length of the balance.
Your contract or company policy can be more generous, for example by paying leave on gross salary. It cannot pay less than the law allows.
When you take leave while employed, the position is different: you are paid your normal salary during the leave. The basic-salary rule applies to the cash payout of unused days at the end of service.
Daily rate: dividing by 30
The law does not spell out a formula for the daily rate. Dividing the monthly basic salary by 30 is the method in common use, and it is the one our calculator applies. Ask your employer which method it uses if your figure differs.
| Basic monthly salary | Day’s rate (÷ 30) | 10 unused days | 18 unused days | 30 unused days |
|---|---|---|---|---|
| AED 4,500 | AED 150 | AED 1,500 | AED 2,700 | AED 4,500 |
| AED 6,000 | AED 200 | AED 2,000 | AED 3,600 | AED 6,000 |
| AED 9,000 | AED 300 | AED 3,000 | AED 5,400 | AED 9,000 |
| AED 12,000 | AED 400 | AED 4,000 | AED 7,200 | AED 12,000 |
Worked example
An employee on a basic salary of AED 6,000 (with allowances bringing the total to AED 9,500) leaves after three years with 18 days of leave untaken.
- Day’s rate: 6,000 ÷ 30 = AED 200
- Leave salary: 18 × 200 = AED 3,600
The allowances are not part of the calculation, unless the contract says they are.
Part-year leave in your last year
You also earn leave for the fraction of your final year. If your last anniversary fell four months before your last working day, you have earned part of that year’s 30 days on top of any balance carried from earlier years. This is usually worked out pro rata: 30 × 4 ÷ 12 = 10 days.
Add those days to your unused balance before multiplying by the daily rate. For someone under one year of service, the 2-days-a-month rule applies instead: after nine months, 18 days.
Carrying leave over and the two-year rule
According to the u.ae portal, you can carry unused leave into the next year with your employer’s consent, under company rules. An employer may not stop you from taking accrued leave for more than two consecutive years.
Some advisers cite a cap on the share of leave you can carry forward. We have not been able to confirm it against an official source, so check your company policy. Whatever balance has legitimately built up is paid when you leave.
Leave salary vs leave encashment while employed
The two terms are often mixed up:
- Leave salary usually means the pay you receive while you are on annual leave. Many employers pay it before the leave starts.
- Leave encashment means being paid cash for leave days you did not take. In the UAE this is clearly due at the end of service. Whether you can cash in leave while still employed depends on your contract and company policy.
Both use the same daily rate in most settlements.
Payment deadline: 14 days after the contract ends
The u.ae portal says end-of-service dues must be paid within 14 days of the contract ending. Those dues are your unused leave, your gratuity and any outstanding salary.
Gratuity is a separate figure: 21 days of basic wage per year for the first five years, then 30 days per year. Work it out with the UAE gratuity calculator, and use our final settlement checklist to make sure nothing is missed. For the rest of the UAE rules, see our UAE labour law guide.
Leaving by resignation or termination: does it change anything?
No. Unused annual leave is earned pay, so it is due however the contract ends: resignation, termination by the employer, or the end of a fixed term. The way you leave can affect notice pay and, in other Gulf countries, gratuity, but not the leave balance. In general, leave already earned stays payable even after a dismissal, although the employer may set off amounts the employee legitimately owes.
Common mistakes in leave settlements
Most errors in a UAE leave payout come from a handful of causes:
- Using the wrong balance. Check your leave records against the days you actually took. Ask for the leave ledger if the employer’s balance differs from yours.
- Forgetting the final part-year. The months since your last anniversary earn leave too, and they are easy to leave out.
- Mixing up the wage. The legal minimum is basic salary. If your contract promises leave on gross pay, the settlement should follow the contract.
- Paying notice-period leave twice or not at all. If you take leave during your notice period with your employer’s agreement, those days come off your balance and are paid as normal salary.
- Deducting a salary advance from the wrong line. Advances and loans may be recovered from the settlement, but they should appear as a separate deduction, not hidden inside the leave figure.
Ask for a written breakdown showing the balance, the daily rate and the total, then check it against the calculator.
A second example: leaving after seven years
An employee on a basic salary of AED 9,000 leaves after seven years with 12 days of leave unused. The day’s rate is 9,000 ÷ 30 = AED 300, so the leave payout is 12 × 300 = AED 3,600. A full year’s leave for this employee is worth 30 × 300 = AED 9,000. If they had also earned leave for part of their final year, those days would be added to the 12 before multiplying.
Calculate your leave salary
Open the UAE leave salary calculator and enter your basic monthly wage, your years of service and your unused days. It shows your yearly entitlement, the value of a day’s leave and the payout for your balance. Results are estimates based on basic wage ÷ 30, not legal advice.
Frequently asked questions
How is leave salary calculated in the UAE?
Unused leave is paid on your basic salary. The common method is basic wage ÷ 30 for the day's rate, multiplied by the number of unused days. On a basic wage of AED 6,000, 18 unused days come to AED 3,600.
Is leave encashment calculated on basic or gross salary in the UAE?
The official UAE government portal says unused leave paid at the end of service is calculated on basic salary. Your contract can be more generous, but not less.
How many days of annual leave do I get in the UAE?
30 calendar days a year once you have completed one year of service, and 2 days for each month of service between six months and one year.
Is leave earned in my last part-year paid?
Yes. When you leave, you are paid for your unused leave balance and for the leave earned in the fraction of the final year.
When must my employer pay my leave salary?
End-of-service dues, including unused leave and gratuity, are due within 14 days of the contract ending.