UAE annual-leave entitlement
UAE Federal Decree-Law No. 33 of 2021, in force from 2 February 2022, sets paid annual leave at 30 calendar days per year for any worker who has completed one full year of service. For service between 6 and 12 months, leave accrues at 2 days per month, so a worker who served 8 months earns 16 days. Below 6 months no statutory annual leave accrues. The final partial year is always pro-rated: 6 months served into the final year gives 15 days of accrued leave, 3 months gives 7.5 days, and so on. The calculator above applies this pro-rata to any service figure you enter.
How unused-leave encashment is calculated
When you leave the company, any annual leave accrued and not taken is paid out. The formula is the basic monthly salary divided by 30 to get a daily basic, multiplied by the number of unused days. Unused days are the leave accrued in the current or final year minus the days you have already taken, floored at zero. The single most important point: this encashment is calculated on basic salary only. Housing, transport and other allowances are excluded from the encashment base by law. Workers whose basic is a small slice of total pay see a much smaller encashment than the headline salary would suggest.
Leave taken during employment vs leave encashed at exit
There is a deliberate gap in the law between the two. Leave that you actually take while employed is paid on your full wage, meaning basic plus the contractual allowances. Leave that remains unused at the end of service is encashed on basic salary only. For a worker with a large allowance component, this means taking leave during the year is worth more per day than banking it for encashment. As a rule of thumb, use your leave rather than save it, unless your employer specifically values the banked balance at the full wage in writing.
Notice-period rules
The standard notice period is contractual and must sit between 30 and 90 days. During probation the rules are different: an employer ending the contract gives 14 days notice, while an employee leaving to move to a new UAE employer gives 30 days notice. Notice pay is settled on the full wage for the days served and is treated separately from leave encashment. Leave keeps accruing during the notice period because it counts as service, so the final encashment includes any days earned across the notice run.
Worked examples
Example 1: 2 years 6 months, AED 10,000 basic, 0 days taken. The worker has completed more than one year, so the final 6-month partial year accrues 15 days (30 days pro-rated by 6 of 12 months). With 0 days taken, all 15 days are unused. Daily basic is AED 333.33, so encashment is 15 times AED 333.33, which is AED 5,000.
Example 2: 8 months service, AED 6,000 basic, 4 days taken. Under one year, leave accrues at 2 days per month from month 6, so 8 months gives 16 days. With 4 days taken, 12 days remain unused. Daily basic is AED 200, so encashment is 12 times AED 200, which is AED 2,400.
| Service into final year | Accrued leave days |
|---|---|
| 3 months (after 1 year) | 7.5 |
| 6 months (after 1 year) | 15 |
| 9 months (after 1 year) | 22.5 |
| 12 months (full year) | 30 |
| 6 months (under 1 year) | 12 |
| 8 months (under 1 year) | 16 |
The scenarios table below pairs three common exits with the inputs you would type into the calculator and the encashment they produce. Because the UAE pays on basic salary only, a worker whose basic is a small slice of total pay sees a smaller figure than the headline salary suggests, so the basic column is the one that drives the result.
| Scenario (service / basic / days taken) | Unused days | Encashment |
|---|---|---|
| 2y 6m / AED 10,000 / 0 | 15 | AED 5,000 |
| 8m / AED 6,000 / 4 | 12 | AED 2,400 |
| 3y 9m / AED 12,000 / 10 | 12.5 | AED 5,000 |
How the UAE compares across the GCC
The accrual rate is similar across the Gulf, but the pay base used for encashment is not, and that is where settlements differ most. The UAE pays unused leave on basic salary only. Saudi Arabia pays on the full wage, so the same days are usually worth more there for a worker with heavy allowances. Qatar, like the UAE, pays on basic only. Bahrain uses basic plus the social allowance, Oman uses the gross salary, and Kuwait uses basic plus regular allowances over a 26-day divisor rather than the 30-day divisor the UAE applies. If you are comparing an offer or a transfer, run the Saudi leave salary calculator against this one to see how the base changes the payout, and check the GCC paperwork cost and processing-time index for the wider cost picture of moving between countries.
Common mistakes and edge cases
The most frequent error is encashing on the full salary rather than the basic. By law the base is basic only, so an HR sheet that uses the gross figure overstates the payout and one that uses an artificially low basic understates it. A second trap is forgetting that leave keeps accruing through the notice period, so the balance at the last working day is higher than the balance on the resignation date. Workers under six months of service sometimes expect a payout, but no statutory leave accrues below the six-month mark, so the encashment is zero. Finally, days the employer directs you to take during notice reduce the unused balance, so reconcile the leave ledger before you sign. If the company will not settle within 14 days, that is a MOHRE matter: our guide to GCC overstay fines and the family sponsorship salary thresholds across the GCC cover the knock-on issues that often follow a delayed final settlement. If you are moving to Saudi Arabia after the UAE, the Saudi final exit visa guide explains the equivalent exit paperwork.
Related calculators
What to do next
The employer must settle leave encashment, gratuity, any unpaid wages and notice-period dues within 14 days of the last working day. Cross-check the leave balance recorded by HR against your own count before you sign anything. Keep your MOHRE contract, the WPS payslips for the final months and your leave records ready, as those are the documents a labour officer will ask for in a dispute. To estimate the other half of your exit settlement, run the UAE gratuity calculator. If you are leaving the country, the UAE overstay fine calculator helps time the residence cancellation grace against your exit flight. For the full picture of work permits, contract types and dispute routes, see the UAE work permit guide and the UAE country guide.