Understanding Leave Salary Calculation in UAE: A Complete Guide
Calculating leave salary in the UAE can be complex due to various factors like contract type, service duration, and salary components. Our comprehensive guide explains everything you need to know about UAE leave salary calculation according to MOHRE regulations.
What is Leave Salary in UAE?
Leave salary, also known as vacation pay, is the compensation employees receive for their entitled annual leave days. Under UAE labor law, all employees are entitled to paid annual leave, and when employment ends, any unused leave days must be compensated financially.
Leave Salary Calculation Formula in UAE
The standard formula for calculating leave salary in UAE is:
However, the actual calculation can vary based on:
- Contract type (limited vs unlimited)
- Employment status (current vs resigned)
- Service duration
- Salary structure
Types of Leave in UAE
| Leave Type | Entitlement | Paid/Unpaid |
|---|---|---|
| Annual Leave | 30 days per year | Paid |
| Sick Leave | 90 days per year | Partially paid |
| Maternity Leave | 45 days | Paid |
| Study Leave | 10 days per year | Paid |
Practical Examples of Leave Salary Calculation
Example 1: Current Employee Taking Leave
Ahmed has completed 3 years of service with a basic salary of AED 8,000 and housing allowance of AED 2,000. He wants to take 10 days of annual leave.
Calculation:
- Daily wage = (8,000 + 2,000) / 30 = AED 333.33
- Leave salary for 10 days = 333.33 × 10 = AED 3,333.30
Example 2: Resigned Employee with Unused Leave
Sarah resigned after 5 years with a total salary of AED 15,000 (basic AED 10,000 + allowances AED 5,000). She has 12 unused leave days.
Calculation:
- Daily wage = 15,000 / 30 = AED 500
- Leave salary = 500 × 12 = AED 6,000
Common Mistakes in Leave Salary Calculation
Many employees and employers make errors when calculating leave salary. Here are the most common mistakes to avoid:
- Using only basic salary instead of total salary (basic + allowances)
- Not considering the exact service duration (years + months)
- Incorrectly calculating daily wage rate
- Forgetting to account for already taken leave days
- Not updating calculations according to recent labor law changes
How Our UAE Leave Salary Calculator Works
Our online leave salary calculator simplifies the complex calculations by:
- Automatically determining your leave entitlement based on service duration
- Calculating daily wage rate considering all salary components
- Adjusting for already taken leave days
- Providing detailed breakdown of the calculation
- Allowing you to save, print, or download results
For more information on UAE labor regulations, visit the official MOHRE website or consult with a legal expert.
Frequently Asked Questions
When resigning, your employer must pay you for all unused annual leave days. The calculation is based on your total salary (basic + allowances) divided by 30, multiplied by the number of unused leave days.
Yes, according to UAE labor law, all fixed allowances that form part of your regular income should be included when calculating leave salary.
Employees are entitled to 30 days of paid annual leave after completing one year of service. For partial years, leave is calculated proportionally (2.5 days per month).
No, payment for unused leave is a legal right. If your employer refuses, you can file a complaint with MOHRE or the relevant labor department in your emirate.
The basic calculation is the same across all UAE emirates as it follows federal labor law. However, some free zones may have specific regulations, so it's best to check with your HR department.
The calculation method is the same for both limited and unlimited contracts - based on total salary and unused leave days. The main difference is in end-of-service benefits.
For service less than one year, leave is calculated proportionally at 2 days per month. You're entitled to this leave salary upon termination of contract.
Only fixed allowances are included. Variable components like commissions or bonuses are typically not included unless specified in your employment contract.
Our calculator follows MOHRE guidelines and provides accurate estimates. However, for official purposes, always verify with your HR department as company policies may vary.
For current employees, leave salary is paid with your regular salary when taking leave. Upon resignation, it should be paid with your final settlement within 14 days of contract termination.
