How Is Annual Leave Entitlement Calculated in the UAE?

Key facts

The specifics, before the explanation.

• Full entitlement: 30 paid days per year, after 1 year of continuous service
• Pro-rata entitlement for 6-12 months of service: 2 days per month worked
• Leave taken during employment is paid at full wages (basic + allowances)
• Leave encashed at termination is calculated on basic salary only, using (basic salary ÷ 30) × days owed
• Employees can carry forward up to half their entitlement (max 15 of 30 days) to the following year, with employer agreement
• Employers cannot prevent an employee using accrued leave for more than 2 consecutive years

What this actually means

Thirty days is the headline figure most job seekers know, but the mechanics around it trip people up, especially the difference between leave you take while employed and leave you cash out when you leave. Leave taken during your employment is paid at your full wage, including allowances, while any leave you haven't used by the time you exit gets calculated on basic salary only, using a specific per-day formula. That gap can matter meaningfully if your package leans heavily on allowances.

Carry-over has a real limit too: you can roll over at most half your entitlement, 15 of your 30 days, into the following year, and only with your employer's agreement. It isn't an automatic right to stockpile leave indefinitely.

One protection worth knowing: your employer legally cannot block you from using your accrued leave for more than two consecutive years. If you're being repeatedly told to postpone leave far beyond that, that's a specific point worth raising with MOHRE.

What to actually do

Rules and figures move. Confirm anything time-sensitive with the official regulator before you rely on it.

• Track your leave balance yourself, don't rely solely on HR's tracking, especially near a resignation
• Remember leave taken during employment pays out at full wage, while encashment on exit uses basic salary only
• Confirm any carry-over agreement with your employer in writing rather than assuming it's automatic
• If leave requests are repeatedly denied for over two years running, raise it with MOHRE
• Calculate your expected leave encashment before resigning so your final settlement isn't a surprise

Frequently asked questions

Do I get 30 days of annual leave from my very first day?

No. The full 30-day entitlement applies after 1 year of continuous service; employees with 6-12 months get a pro-rated 2 days per month worked.

Is leave encashment calculated the same way as leave pay during employment?

No. Leave taken during employment is paid at full wages including allowances, while leave encashed when you leave the company is calculated on basic salary only.

Can my employer refuse to let me take my annual leave?

Your employer cannot prevent you from using accrued annual leave for more than two consecutive years, though timing within that window can be subject to business needs.

Sources

Referenced for this guide:

• U.AE (Official UAE Government Portal): Annual leave