Leave Salary Calculator UAE: Know Your Leave Encashment
Use this leave salary calculator UAE to check your unused annual leave pay based on current UAE Labour Law.
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Free tools to understand your full employment rights in the UAE.
Understanding Your Rights
What Is Leave Salary in the UAE?
Leave salary is the pay you receive while on approved annual leave during employment. Under current UAE Labour Law, your employer must pay your full wage for those leave days. This means your basic salary plus all fixed allowances.
Leave encashment, also called cash in lieu, is different. It is the payout you receive for unused leave days when your employment ends. This calculation uses your basic salary only, not your full package. This distinction matters because the difference can be thousands of dirhams.
The rules come from Article 29 of Federal Decree-Law No. 33 of 2021, enforced by the Ministry of Human Resources and Emiratisation (MOHRE). Every private sector employee who has completed six months of continuous service qualifies for annual leave.
(Full Wage ÷ 30) × Leave Days(Basic Salary ÷ 30) × Unused Leave DaysFormulas verified against UAE Federal Decree-Law No. 33 of 2021 and MOHRE official guidelines.
Step-by-Step Guide
How to Calculate Leave Encashment in the UAE
Many employees confuse leave salary with leave encashment, or they use the wrong salary base. Here is the precise method recognised by MOHRE and UAE labour courts, which this calculator applies automatically.
Check Your Latest Payslip
Look for the “Basic Salary” line. This is the only number that counts for your final payout. Ignore your housing or transport allowances here. If you are unsure, check your Electronic Labour Contract on the MOHRE app.
Figure Out Your Total Time on the Job
If you have worked between 6 and 12 months, you earn 2 days per month. After one year, you earn 30 days per year. Our calculator handles this pro-rata math automatically so you do not have to guess.
Subtract Vacation Days Already Used
Subtract any annual leave days you have already taken. The number left over is your unused leave balance. This is the exact amount your employer must pay out.
Divide by 30 for Your Daily Rate
Divide your basic salary by 30. UAE law uses 30 calendar days as the standard divisor for all leave calculations, whether you work a 5-day or 6-day week.
Multiply for Your Final Payout
Multiply your daily wage by your unused leave balance. This final number is what goes into your end-of-service settlement.
Do Not Let Anyone Discourage You
Do not let anyone tell you that resigning means losing your leave pay. Under current UAE Labour Law, both resigned and terminated employees with six or more months of service are eligible for full leave encashment.
Real-World Examples
Leave Encashment Calculation Examples
These examples use the exact logic this calculator applies. All figures follow current UAE Labour Law using the 30-day divisor recognised by MOHRE.
Both examples use basic salary only for the encashment calculation, as required under UAE Labour Law. Leave salary while still employed would use the full wage instead.
Leave Entitlement Rules
Annual Leave Entitlement in the UAE
Under current UAE Labour Law, your annual leave entitlement depends on how long you have worked. The leave carry-forward policy allows unused days to roll over, but with a clear limit. Your employer cannot prevent you from taking leave for more than two consecutive years.
For employees with less than one year of service, leave accrues at 2 days per month after completing six months. After one full year of continuous service, the standard entitlement is 30 calendar days per year.
Public holidays and sick leave are not counted as part of your annual leave. If a public holiday falls during your leave period, it does not reduce your leave balance.
| Service Period | Leave Entitlement | How It Works |
|---|---|---|
| Less than 6 months | 0 days | Not eligible for any annual leave |
| 6 to 12 months | 2 days/month | Accrues proportionally each month |
| 1 year or more | 30 days/year | Full entitlement, roughly 2.5 days per month |
Leave Salary vs Leave Encashment: Key Differences
The most common source of confusion for UAE employees is whether leave pay uses basic salary or full wage. The answer depends on when the leave is being paid. Here is a direct comparison.
| Factor | Leave Salary (While Employed) | Leave Encashment (End of Service) |
|---|---|---|
| Salary Base | Full wage (basic + allowances) | Basic salary only |
| When Paid | Before your leave starts | As part of your final settlement |
| Payment Deadline | Before the leave period begins | Within 14 days of last working day |
| Legal Basis | Article 29, current UAE Labour Law | Article 29, current UAE Labour Law |
| Applies To | Leave taken during employment | Unused leave at resignation or termination |
Eligibility and Special Cases
Who Is Eligible for Leave Encashment in the UAE?
Under current UAE Labour Law, leave encashment eligibility covers all private sector employees who have completed at least six months of continuous service. This includes both resigned and terminated employees.
Resignation vs Termination: Leave Encashment Comparison
The reason for leaving does not affect your leave encashment under current UAE Labour Law, with one specific exception.
| Scenario | Service Required | Encashment? | Notes |
|---|---|---|---|
| Voluntary Resignation | 6 months or more | Full Encashment | Based on basic salary for all unused days |
| Termination by Employer | 6 months or more | Full Encashment | Must be paid within 14 days of last working day |
| End of Fixed-Term Contract | 6 months or more | Full Encashment | Applies whether contract is renewed or not |
| Gross Misconduct (Article 44) | Any | May Forfeit | Employer may withhold. Challenge via MOHRE or Labour Court |
| Resignation Under 6 Months | Under 6 months | Not Eligible | No leave accrues before six months of service |
Competitor Differentiation
Free Zone Leave Rules: DIFC, ADGM, JAFZA, and DMCC
Most leave salary calculators ignore free zone rules entirely. This is a serious gap. Free zones like DIFC, ADGM, JAFZA, DMCC, and DDA often have their own employment regulations that differ from mainland UAE Labour Law.
DIFC Leave Entitlement
Employees in the DIFC are governed by DIFC Employment Law No. 4 of 2005 (as amended). Annual leave is typically 20 working days, not 30 calendar days. Encashment rules and accrual rates differ from mainland law.
ADGM Leave Entitlement
ADGM operates under its own employment regulations. Leave entitlements, accrual rates, and encashment calculations may differ from both mainland UAE Labour Law and DIFC rules. Check your ADGM employment contract.
JAFZA and DMCC Rules
Free zones like JAFZA and DMCC generally follow mainland UAE Labour Law for leave entitlements. However, some free zones have specific employee handbooks with variations on carry-forward limits and encashment timing.
Always Check Your Contract
Some free zone employers offer leave terms that are more generous than the legal minimum. Your employment contract controls if it provides better benefits than the default law. This calculator applies mainland UAE rules only.
About UAE Calculators
Why Trust This Calculator?
UAE Calculators is a free resource built for employees and employers across Dubai, Abu Dhabi, Sharjah, and every emirate. Our tools give clear, law-compliant answers without requiring a lawyer or HR consultant to interpret them.
Every formula on this page is cross-referenced against current UAE Labour Law and MOHRE’s official guidelines. Content is reviewed by UAE-based HR consultants whenever labour regulations change.
No salary data you enter is collected, stored, or shared. All calculations run entirely in your browser.
Common Mistakes
Leave Encashment Errors That Cost Employees Money
These are the most frequent mistakes UAE employees make when calculating or claiming their leave pay.
Frequently Asked Questions
UAE Leave Encashment: Common Questions Answered
The most searched questions about leave salary and leave encashment in the UAE, answered accurately under current UAE Labour Law.
Leave encashment in the UAE is calculated by dividing your monthly basic salary by 30 to get a daily wage. Multiply this daily wage by your total unused accrued leave days. Under current UAE Labour Law, the final settlement always uses the basic salary, not total compensation.
Leave encashment at the end of service is calculated strictly on your basic salary. However, if you take annual leave while still employed, your employer must pay your full gross salary including allowances for those leave days. This is a critical distinction in UAE Labour Law.
“Leave salary” refers to your regular pay while taking annual leave during employment, which includes all allowances. “Leave encashment” or “cash in lieu” is the final payout for unused leave days at the end of service, which is calculated using only your basic salary.
In your first year of service, you accrue 2 days of annual leave per month after completing six months. After completing one year of continuous service, you are entitled to the standard 30 calendar days of annual leave per year.
No. If you resign during the six-month probation period, you are not entitled to any annual leave or leave encashment. You must complete at least six months of continuous service to qualify for the pro-rata 2 days per month accrual.
Yes. Under UAE Labour Law, an employee can carry forward unused annual leave to the following year, but the maximum balance cannot exceed double the standard entitlement. For a 30-day annual leave allowance, the maximum carry-forward limit is 60 days.
No. Public holidays, sick leave, and maternity leave are not counted as part of your 30-day annual leave entitlement. If a public holiday falls during your annual leave, it does not reduce your leave balance.
Yes. Under Article 29 of the UAE Labour Law, employees continue to accrue annual leave days while on sick leave or maternity leave. Your leave balance is not reduced or paused during these legally protected absences.
No. Free zones like DMCC, JAFZA, and DDA often have their own employment regulations that differ from mainland UAE Labour Law. You must check your specific free zone employment contract, as leave encashment rules may vary.