UAE Leave Salary Calculator
Calculation Results
Introduction:
If you're working in the UAE, understanding how your leave salary calculation in UAE works is essential. Whether you are planning a vacation, preparing for resignation, or simply curious about your benefits, leave salary is one of the most important entitlements under UAE Labour Law. This guide will walk you through everything you need to know from basic rules to formulas, benefits, and frequently asked questions so you can calculate your leave pay accurately and confidently.
What is the leave salary calculation in UAE
Before diving into the actual calculation, let’s first break down what leave salary means in the UAE:
- Leave Salary is the amount paid to an employee for unused annual leave days or during annual leave.
- It is a mandatory benefit under UAE Labour Law (as per Federal Decree Law No. 33 of 2021).
- An employee who has completed one uninterrupted year of service is entitled to 30 calendar days of paid annual leave, as per the labor laws of the UAE.
- If an employee has worked for less than a year but more than six months, they are entitled to leave on a pro-rata basis.
Why is Leave Salary Important for Employees and Employers?
Leave salary ensures that employees:
- Get paid fairly for time off,
- Enjoy their holidays without financial worries,
- Know their rights in case of job change or resignation.
For employers, it ensures legal compliance and helps maintain trust and transparency in the workplace.
How to Calculate Leave Salary in UAE
Now let’s get into the main part: how exactly is leave salary calculated in UAE?
The general formula is:
- Leave Salary is calculated by dividing the basic monthly salary by 30 and then multiplying the result by the total number of eligible leave days: Leave Salary = (Basic Monthly Salary ÷ 30) × Leave Days Earned
Important Notes:
- The calculation is based solely on the employee’s basic salary, with no inclusion of additional benefits such as housing, transport, or performance bonuses.
- Employees typically receive 30 days of annual leave each year.
- If you have unused leave when resigning or being terminated, you are entitled to receive cash in place of those days.
Step-by-Step Leave Salary Calculation Example
Let’s assume:
- Your basic salary = AED 6,000
- You’ve worked for 2 years.
- You have 45 days of unused leave.
Step 1: To determine the daily basic wage, divide the monthly basic salary (AED 6,000) by 30. This results in a daily rate of AED 200.
Step 2: AED 200 × 45 = AED 9,000 (leave salary payout)
Types of Leave Covered in UAE
Besides the annual leave, UAE labour law also recognizes:
- Sick Leave
- Maternity/Paternity Leave
- Compassionate Leave
- Hajj Leave
- Study Leave (in specific cases)
Note: Only annual leave qualifies for leave salary as per the calculation formula.
Benefits of Leave Salary in UAE
Having a clear grasp of your leave salary entitlements and confirming correct payments can offer several key advantages:
1. Financial Security: You get paid even when you're not working.
2. Employee Satisfaction: Encourages work-life balance.
3. Legal Protection: Prevents disputes during resignations or terminations.
4. Transparency: Helps build trust between employer and employee.
Common Scenarios for Leave Salary Calculation
Here are some real-life examples where leave salary calculation in UAE becomes important:
1. During Resignation or Termination
If you resign with unused leave, the employer must compensate you in cash.
2. Going on Annual Leave
You are entitled to full pay during your approved annual leave period.
3. Unused Leave Accumulation
If your leave gets carried over for two years or more, you can still request leave salary for those unused days.
Leave Salary During Probation Period
During the probation period, employees are not entitled to receive paid annual leave or any leave salary benefits. However, after completing six months, they can start earning leave on a pro-rata basis.
Leave Salary for Part-Time or Temporary Workers
Leave salary for part-time employees is determined proportionally, based on the total number of hours they have worked. It follows the same formula but is adjusted based on agreed terms in the employment contract.
Uses of Leave Salary Calculation in Real Life
- Exit settlements
- HR audits
- Salary planning
- Legal compliance
- Employee financial planning
Frequently Asked Questions (FAQs)
Q1. Does the UAE calculate leave salary using the gross salary amount?
No. Leave salary is calculated only on your basic salary, not your gross income.
Q2. Can my employer deduct from my leave salary?
Deductions are not allowed unless for legal reasons like overpayments or penalties mentioned in your contract.
Q3. Can I carry forward my leave salary?
Yes, but it's advisable to take leave within two years or convert it into cash if not taken.
Q4. Is leave salary taxable in UAE?
No, since the UAE has no personal income tax system, any leave salary received by employees is entirely tax-free.
Q5. What if I fall sick during my leave?
If you submit medical proof, those days can be converted into sick leave, preserving your annual leave balance.
Conclusion:
Whether you're an employee or an HR professional, understanding the leave salary calculation in UAE is crucial for smooth workplace operations. Knowing how it’s calculated, when it’s applicable, and what your rights are will empower you to make informed decisions and avoid surprises. Use the simple formula, stay updated with labour laws, and don’t hesitate to talk to HR or legal advisors if in doubt.
By using this guide, you can ensure that you never lose what you rightfully earn and always receive the full benefits you deserve.