Leave salary in the UAE: how it's calculated

Basic or full salary? It depends on the payment

“Leave salary” covers different payments, and the law gives each its own base. Most pages give one formula for all of them, which is why they disagree. The three rules, from Federal Decree-Law 33 of 2021 (opens in a new window) and its Executive Regulations (opens in a new window):

• Leave you take: your full wage, basic plus allowances (Art. 29(1) and 29(6)).
• Unused leave paid out when the job ends: basic salary only (Art. 29(9); Executive Regulations, Art. 19(2)).
• Leave you agree to cash in while you stay in the job: the wage you receive at the time, so the full wage (Executive Regulations, Art. 19(1)).

This guide follows the federal labour law, which covers the mainland and most free zones, such as Dubai Internet City. The DIFC and ADGM have their own rules. For how many days you get, and the other kinds of leave, see working hours and leave.

Pay while you're on leave: your full wage

When you take annual leave, your pay doesn't change. The law gives you “an annual leave with full wage” and adds: “The worker shall be entitled to the wage for the period of his annual leave” (Art. 29(1) and 29(6) (opens in a new window)).

“Wage” is a defined term. Art. 1 defines it as the basic wage plus the cash allowances and benefits in kind your contract gives you, and the basic wage as the contract wage that “does not include any other allowances or benefits in-kind”. So housing, transport and every other allowance in your contract are paid while you're away. No clause in your contract is needed for that. MOHRE's guidance for workers (opens in a new window) says the same: annual leave is on full pay.

Many people are told otherwise:

“Basic plus housing” was the rule of the old labour law, Federal Law 8 of 1980 (Khaleej Times quotes its Art. 78 (opens in a new window)). The current law repealed it (Art. 73) and has applied since 2 February 2022 (Art. 74). A lawyer asked by Gulf News (opens in a new window) about paying only basic, or basic plus housing, during leave answered: “Under UAE Labour Law, this practice is non-compliant”.

Two more points. You may read that leave pay must reach you before the leave starts: nothing in Art. 29 or the Regulations sets a date, and wages stay due on their usual dates (Art. 22). And if you come back late without a good reason, you aren't paid for the days you were absent (Art. 34).

Unused leave when the job ends: basic only

If you resign or are let go with leave you haven't taken, your employer pays it out, and this payment is on basic salary alone. Art. 29(9) gives you a wage for the leave days you built up and didn't use, “regardless of the leave duration”, and leave for part of your last year “in proportion to the period he spent in work and it shall be calculated according to the basic wage” (the labour law (opens in a new window)).

The Executive Regulations leave no doubt: “If the worker's service ends, he shall be paid a cash allowance for the balance of his legally due annual leave, according to the basic wage” (Cabinet Resolution 1 of 2022, Art. 19(2) (opens in a new window)). u.ae (opens in a new window) says the same.

That is why the basic share of your package matters before you sign. Two offers with the same monthly total pay different amounts for the same unused days, and for gratuity too: see basic salary and allowances. The law sets minimum rights (Art. 65), so a contract or company policy can pay unused leave on the full wage. Ask before you accept.

How to calculate leave salary, with a worked example

The sum is the number of days times a day's pay. For a day's pay, divide the monthly figure by 30: your basic salary for unused leave at the end, your full wage for leave you take.

Why 30, whatever the length of the month? No article sets a day's pay for people paid by the month. Art. 67 says a month counts as 30 days when the law's periods are worked out, and MOHRE's own guide to overtime, wages and leave divides basic salary by 30 on the way to an hourly wage (MOHRE's guide (opens in a new window)). Employers and the published calculators do the same, and so does ours.

1. 1

   The package

   Take a typical software engineer package of AED 30,500 (≈ ₹7.9 lakh) a month, with a basic salary of AED 18,500 (≈ ₹4.8 lakh).
2. 2

   The unused days

   You've worked more than a year and leave 8 months into the next one, without taking any of that year's leave. At 2.5 days a month, you're owed 20 days.
3. 3

   A day's basic pay

   The basic salary divided by 30 is about AED 617 (≈ ₹16,000) a day.
4. 4

   The payout

   20 days at that rate come to AED 12,333 (≈ ₹3.2 lakh), paid with your final settlement.

The same 20 days taken as leave while you were employed would be paid on your full wage: AED 20,333 (≈ ₹5.3 lakh), or AED 8,000 (≈ ₹2.1 lakh) more. Leave you take is worth more than leave you're paid for at the end.

Put your own basic salary, dates and unused days into the free gratuity and leave salary calculator: it works out the leave payout and your gratuity by the same rule, with each step shown. It doesn't work out pay for leave you take, which is your normal monthly pay.

Your first year and part years

• After a full year: 30 days of leave a year (Art. 29(1)(a)).
• More than 6 months but under a year: 2 days for each month (Art. 29(1)(b)).
• A part year when you leave: leave in proportion to the time you worked (Art. 29(9)). 30 days a year works out at 2.5 days a month; that figure is arithmetic, not the law's wording.
• Part-time work: leave in proportion to your hours, with at least 5 working days a year (Executive Regulations, Art. 18).

The first 6 months are the gap. The law states no rate for them. Your employer may let you take leave during probation, and if you don't pass probation you keep the right to be paid for the leave balance you have left (Art. 29(3)). How many days that is, the text doesn't say: ask your employer in writing, or ask MOHRE.

Unpaid leave needs your employer's approval and doesn't count as service (Art. 33), which also lowers your gratuity: see how gratuity is worked out.

Carrying leave over, cashing it in and who picks the dates

• Dates: you take leave in the year you earn it. Your employer can set the dates to fit the work, in agreement with you, or rotate leave among staff, and must tell you at least 1 month ahead (Art. 29(4)).
• Carry-over: with your employer's approval and under the company's rules, you can carry forward up to half of a year's leave, 15 days (Art. 29(5); Executive Regulations, Art. 19(1)).
• Cash instead: you and your employer can agree on cash in place of the leave, paid “according to the wage he receives at the time of his entitlement to the leave” (Executive Regulations, Art. 19(1)). That is the full wage, not basic. It takes both sides to agree.
• A limit on your employer: it can't keep you from using leave you've built up for more than 2 years, unless you choose to carry it over or take cash (Art. 29(8)).
• What counts as a leave day: the law counts days, not working days, and holidays that fall inside your leave are part of it unless your contract or the company's rules are more generous (Art. 29(7)).

u.ae (opens in a new window) words one point differently: it says carried-over days are paid on basic salary. The Regulations' own words are “the wage”, so we follow them. If your employer pays cashed-in leave on basic while you're still employed, point to Art. 19(1).

If notice is given while you're on leave, the notice period starts the day after you're due back, unless you both agree otherwise (Art. 35): see probation, notice and resigning.

Leave salary in your final settlement

Unused leave is one line of your final settlement, next to your last salary and your gratuity. Everything you're owed must be paid within 14 days of the end of your contract (Art. 53). The sum is only as right as the day count, so ask HR for your leave balance in writing before your last day.

Our guide to the final settlement covers every line, what can be deducted and what to do if it's late.

DIFC and ADGM: a different sum

In the DIFC you get 20 working days of paid leave a year once you've been employed for 90 days. Leave you take and unused leave at the end are both paid at your daily wage: your annual wage divided by 260 for a 5-day week. The wage includes allowances and leaves out bonuses and similar extra payments, so in the DIFC allowances count in both payments. Unused leave carries forward for up to 12 months, then expires (DIFC Employment Law (opens in a new window), Arts. 27 and 28 and Schedule 1).

ADGM in Abu Dhabi follows the same pattern: at least 20 working days a year, and unused leave paid at a daily wage of the annual wage divided by 260 for a 5-day week (Employment Regulations 2024 (opens in a new window), ss. 21 and 22; ADGM's guidance (opens in a new window)).

Our calculator follows the federal law. In its DIFC setting it shows no leave salary, because the federal sum doesn't apply there.

Sources

1. Cabinet Resolution No. 1 of 2022, the Executive Regulations of the labour law (opens in a new window), MOHRE, 10 October 2026
2. UAE annual leave pay: are you entitled to your full salary, including allowances? (opens in a new window), Gulf News, 26 July 2026
3. Federal Decree-Law No. 33 of 2021 with its amendments, and Cabinet Resolution No. 1 of 2022 (consolidated English text) (opens in a new window), MOHRE, 10 October 2026
4. Types of leave in the private sector (opens in a new window), u.ae, 24 September 2026
5. Guidance on the ADGM Employment Regulations 2024 (opens in a new window), ADGM Employment Affairs Office, 18 February 2025
6. Dear worker: know your rights (opens in a new window), MOHRE, 10 October 2026
7. Employment Law, DIFC Law No. 2 of 2019 (consolidated version No. 5, July 2025) (opens in a new window), DIFC, 10 October 2026
8. Employment Regulations 2024 (consolidated text) (opens in a new window), ADGM, 28 October 2025
9. UAE labour law: can I encash unused annual leaves? (quotes Art. 78 of the repealed Federal Law 8 of 1980) (opens in a new window), Khaleej Times, 15 August 2021
10. Additional working hours, wages and leaves: a guide (opens in a new window), MOHRE, 10 October 2026