Annual leave
30 days
a year, after year one
6 to 12 months
2 days
for each month worked
Leave taken
Full wage
basic + allowances
Unused at exit
Basic ÷ 30
per day, unless contract says more
Mainland private sector under Federal Decree-Law No. 33 of 2021 and its Executive Regulations, checked in September 2026. DIFC and ADGM rules differ (see below).
See how your package splits into basic and allowances
Your basic figure drives both unused-leave pay and gratuity.
How UAE annual leave salary calculation works
| Situation | What you are paid | Salary it is based on |
|---|---|---|
| You take annual leave during employment | Your normal pay for the leave days | Full wage: basic plus regular allowances |
| You resign or are dismissed with unused days | A payment for each unused day | Basic salary ÷ 30 per day |
| You cash in carried-forward leave while employed | A cash allowance, if your employer agrees | The wage at the time you became entitled |
| Your contract promises more | Whatever the contract says | The better of the contract or the law |
So taking your leave never costs you money: a month off is paid like a month worked. The gap only appears when leave goes unused and gets paid out at the end. Paying only basic plus housing during leave, and dropping other regular allowances, is not allowed (Gulf News, July 2026).
Worked example: 15 unused days on an AED 20,000 package
UAE packages are usually split into basic salary and allowances, and the basic share varies by employer. Here is what 15 unused days are worth at exit, using the statutory basic ÷ 30 method:
| Basic share | Monthly basic | Daily rate | 15 unused days |
|---|---|---|---|
| 50% | AED 10,000 | AED 333 | AED 5,000 |
| 60% | AED 12,000 | AED 400 | AED 6,000 |
| 70% | AED 14,000 | AED 467 | AED 7,000 |
Had the days been paid on the full package, they would be worth AED 10,000 in every case. With a 50% basic, you receive half that. The cheapest way to protect the money is to take the days before you leave, when they are paid at your full wage. If your notice period allows, ask to use the leave then.
The basic share also sets your end-of-service gratuity. If you are comparing offers, a higher basic share is worth more than it looks. See basic salary vs total package for the gratuity maths.
How much annual leave you earn
- First six months: no statutory annual leave yet.
- Six months to a year: 2 days for each month of service.
- After a full year: 30 calendar days a year, so weekends inside your leave count as leave days.
- Final part-year: leave in proportion to the time worked, which is what gets paid out if unused.
- Your employer can set the leave dates to fit the business, and should tell you in advance.
Carrying leave forward: you can carry up to half of a year's leave into the next year, or agree a cash allowance for it instead. Your employer can't block you from using leave that has built up for more than two years, unless you chose to carry it forward or cash it in.
DIFC and ADGM: different rules
If your employer is registered in the Dubai International Financial Centre or Abu Dhabi Global Market, the mainland labour law doesn't apply to your leave. Both free zones give 20 working days a year. Weekends aren't counted, and public holidays that fall in your leave are credited back. Carry-forward limits are tighter, and the payout method follows the free zone's own law and your contract. Many banking, finance and fintech roles in Dubai and Abu Dhabi sit in one of these two zones, so check which law your contract names.
Before you resign or sign an offer
- Get your leave balance from HR in writing, and check the day count.
- Find your basic salary on your contract or MOHRE labour contract. That is the figure unused leave is paid on.
- Use your leave during the notice period if you can. It is paid at the full wage.
- When comparing offers, look at the basic share, not just the package. It drives leave payouts and gratuity.
- Recruiters and agencies: quote the basic and allowance split with every offer. Candidates increasingly ask for it.
- If leave pay or the final settlement is short, raise it with HR first, then with MOHRE.
UAE annual leave salary: questions
Is UAE leave salary paid on basic salary or the full package?
It depends on when it is paid. When you take annual leave while employed, you are paid your full wage, meaning basic salary plus your regular allowances such as housing and transport. When you leave the company with unused days, those days are paid out at your basic salary only, unless your contract promises more.
How do I calculate my unused leave payment when I resign?
Divide your monthly basic salary by 30 to get a daily rate, then multiply by your unused days. On a AED 10,000 basic salary, 15 unused days are worth AED 5,000. Check the day count against your leave balance in your HR system, and the basic figure against your contract or labour card.
Why does my leave encashment look lower than I expected?
Because it uses basic salary, not your total package. If your AED 20,000 package has a 50% basic, 15 unused days pay AED 5,000, not the AED 10,000 you get by using the full package. The same basic-salary rule drives your end-of-service gratuity, so a low basic share shrinks both.
How many days of annual leave do I get in the UAE?
On the mainland, 30 calendar days a year once you have completed a year of service. Between six months and a year, you earn 2 days for each month. In your final part-year, you are entitled to leave in proportion to the time you worked.
Can I carry forward or cash in unused leave?
You can carry forward up to half of your annual leave into the next year, or agree with your employer to take a cash allowance for that part instead. Your employer cannot stop you taking leave that has built up for more than two years, unless you chose to carry it forward or cash it in.
Does this apply if I work in the DIFC or ADGM?
No. The DIFC and ADGM have their own employment laws. Both give 20 working days of annual leave, and weekends and public holidays inside a leave period don't count toward it. Carry-forward rules are also different, so check the free zone's own law and your contract.
Is leave salary taxed in the UAE?
There is no personal income tax in the UAE, so leave salary and unused-leave payments are paid in full. UAE nationals and GCC citizens still have their pension contribution deducted from wages in the normal way.
Methodology and limits
Rules come from Article 29 of Federal Decree-Law No. 33 of 2021 and Article 19 of its Executive Regulations (Cabinet Resolution No. 1 of 2022), the UAE government's annual leave guidance, and Gulf News' July 2026 explainer on full wage during leave. Checked in September 2026.
The worked example applies the statutory basic ÷ 30 method to an illustrative AED 20,000 package. Your contract, company policy or a free zone's law may be more generous. This is general information, not legal advice. For a disputed settlement, contact MOHRE or an employment lawyer.