Leave Salary Law in UAE: Updates Every Employee Must Know

Maxpro

Maxpro

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The leave salary law in UAE is a key provision under the UAE Labour Law (Federal Decree-Law No. 33 of 2021), ensuring employees receive fair compensation during their annual leave. Whether you are an expat worker or an employer, understanding these rules is essential to avoid disputes and maintain compliance.

What the Law Says​

Employees in the UAE are entitled to 30 calendar days of paid annual leave after completing one year of service. If an employee has worked for more than six months but less than a year, they are entitled to two days of paid leave per month.

The leave salary is calculated based on the basic salary plus fixed allowances (such as housing), excluding transport or performance bonuses.

Direct Answer: Employees in the UAE must receive their full basic salary plus allowances as leave salary, paid before their annual leave begins.

Recent Updates Every Employee Should Know​

  1. Advance Payment – Employers must pay leave salary before the employee goes on leave.
  2. Encashment of Unused Leave – If an employee resigns or is terminated, they are entitled to cash payment for any unused leave.
  3. Public Holidays – Official UAE public holidays falling during annual leave do not count as part of the 30 days.
  4. Free Zones – Most follow the federal law, but some (like DIFC and ADGM) have their own variations.

Leave Salary Calculation Example​

ComponentAmount (AED)
Basic Salary8,000
Housing Allowance2,000
Total for Leave Salary10,000
If an employee takes 15 days leave, leave salary = (10,000 ÷ 30) × 15 = AED 5,000.

Why Compliance Matters​

For employers, non-compliance can lead to complaints with MOHRE, fines, and reputational damage. Many companies now use HR software like MaxHR to automate leave tracking and ensure accurate, transparent payroll.

Conclusion​

The leave salary law in UAE protects employees and helps employers maintain fair practices. Staying updated with the latest provisions ensures smooth workplace operations and builds mutual trust.
 
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