UAE Annual Leave Rules and Unused Leave Pay

The Labour Law gives at least 30 days of paid leave for each year of service, 2 days a month in the first year after six months, and pay for any unused days when you leave. Here is how it works and how to price your balance.

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How many days you are entitled to

Article 29(1) of Federal Decree Law No. 33 of 2021 sets the minimum annual leave at full wage as follows.

Your contract can give more than the minimum but not less. Article 29(6) confirms you are paid your wage during the leave. Article 29(7) adds that public holidays that fall during your leave are counted as part of it, unless your contract or company rules give you something better.

First year and part years

The law does not give you a full 30 days on day one. In your first year, once you have worked more than six months, you accrue 2 days for each month. During probation, Article 29(3) lets an employer agree to grant leave from your balance, and if you do not pass probation you keep the right to be compensated for the rest of your balance.

After that, leave builds with service. When a contract ends part way through a year, Article 29(9) gives you leave pay for parts of the year in proportion to the time you worked, calculated on the basic wage.

When you can take it and when the employer decides

Article 29(4) says you should take your leave in the year it is earned. The employer may set the dates according to work needs, in agreement with you, or rotate leave between staff. They must tell you the date with enough time, not less than a month.

Article 29(5) allows you to carry forward some or all of your balance to the next year, with your employer's approval and in line with the company's regulations. Article 29(8) adds that an employer cannot stop you using leave that has built up for more than two years, unless you want to carry it forward or take a cash allowance instead, in line with company regulations and the Implementing Regulation.

What you are paid for unused leave when you leave

Article 29(9) says you are entitled to wage for accrued leave days if you quit before using them, regardless of the leave duration, for the period you did not obtain leave. You also receive leave pay for parts of the year in proportion to the period worked. It is calculated on the basic wage.

That gives a simple method for estimating the payout.

1. Work out your total leave entitlement for the period you have not been paid for.
2. Subtract leave you took.
3. Divide your monthly basic salary by 30 for the daily wage.
4. Multiply the daily wage by the unused days.

Worked examples

The first example matches the method used by our MOHRE annual leave calculator. These are illustrations of how the lines add up, not real cases.

How leave connects to your final settlement

Leave pay is a separate line from gratuity. Gratuity is calculated under Article 51 on basic wage and service. Leave pay is calculated under Article 29 on basic wage and unused days. Both are due within 14 days of the contract ending under Article 53. If you only check the gratuity line on your settlement sheet, you may miss a leave balance that is thousands of dirhams.

If you are resigning, the notice period also matters. Article 35 says that if either party gives notice while you are on leave, the notice period does not start until the day after your scheduled return, unless both agree otherwise.

Leave during notice and at the end of a contract

Many people ask whether they can use their leave balance as part of their notice period. The Decree Law does not give a blanket rule in the articles quoted here, so the answer depends on your contract and on what your employer agrees. If you plan to do it, ask for the arrangement in writing, including whether the leave days run inside the notice period or are paid out on top of it.

Also check how your last day is recorded. If leave is taken before the end date, the contract end date moves later, and that moves the 14 day payment deadline in Article 53. A clear written last working day and contract end date avoids arguments about when the money was due.

Finally, remember that leave and gratuity are different tests. Leave starts to accrue from the first month. Gratuity does not begin until you have completed one year of continuous service. Someone leaving after ten months has no gratuity but may well have leave pay due.

Common problems

• The employer says unused leave was forfeited. Article 29(9) says you are entitled to the wage for accrued days when you quit.
• The settlement pays leave on the total package. The article says to calculate on basic wage, so check which base was used, in both directions.
• Leave is counted in working days when the contract is in calendar days. Compare the unit in your contract with the unit on the sheet.
• The balance on HR's system does not match your own record. Ask for the ledger and compare it with your leave approvals.

If the difference is not resolved in writing, you can submit a request to MOHRE under Article 54.

Important note

This guide is general information based on official sources, not legal advice. Your contract may give you more than the legal minimum, and the Implementing Regulation adds detail. For a dispute, contact MOHRE or a UAE qualified lawyer.

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