Understanding how leave salary is calculated can be a bit tricky, especially when you’re dealing with labor laws in a fast-paced environment like the UAE. Whether you’re an employee eager to understand your entitlements or an employer trying to ensure compliance with the law, this guide will walk you through the essentials of leave salary calculation as outlined in of the UAE Labor Law.
Online Leave Salary Calculator
What Is Leave Salary?
In simple terms, leave salary is the amount an employee continues to receive while they’re on annual leave. This salary isn’t just restricted to basic pay—it includes allowances like housing, transportation, and others that are part of your employment contract. The goal is to ensure that employees can enjoy their time off without financial stress, receiving their full earnings even though they’re not working.
Key Points to Know
Here’s a quick overview of the most important aspects of leave salary in the UAE:
- Entitlement to Leave: Employees are entitled to 30 days of paid annual leave after completing one year of continuous service. If you’re a new employee, you’re entitled to two days of paid leave per month after six months of service.
- Components of Leave Salary: Your leave salary is made up of both your basic salary and any additional allowances mentioned in your employment agreement (e.g., housing, transportation, etc.).
- Legal Basis: The UAE’s Federal Decree-Law No. 33 of 2021 provides the legal framework for leave salary entitlements.
How Is Leave Salary Calculated?
Leave salary calculation is more straightforward than it sounds, but there are a few factors you need to consider. Here’s a step-by-step breakdown:
- Calculate the Monthly Salary: First, determine the total monthly salary, including both the basic salary and any allowances you may receive (housing, transportation, etc.).
- Daily Salary: To calculate the daily leave salary, divide the total monthly salary by 30 (the number of days in a month). This will give you your daily salary rate.
Check out average salaries across major UAE cities like Dubai, Abu Dhabi, Sharjah, and Ras Al Khaimah.
Example:
Let’s say your basic pay is AED 10,000, and your housing allowance is AED 2,000.
- Total Monthly Salary = AED 12,000
- Daily Salary = AED 12,000 ÷ 30 = AED 400
If you’re entitled to 30 days of annual leave, your leave salary would be AED 12,000. - Leave Salary: Once you have the daily salary, simply multiply it by the number of leave days you’re entitled to. So, if you have 30 days of leave, you’ll receive your full monthly salary as your leave salary.
What Happens If You Don’t Use Your Leave?
If you don’t take all your annual leave during the year, you’re still entitled to some compensation. According to the law, if your employment is terminated before you’ve used all your leave, you’re entitled to receive cash compensation for any unused leave days. This cash payment will be based on your basic salary.
Part-Time Employees and Leave Salary
Part-time workers are also entitled to annual leave. However, the duration and calculation depend on their working hours as per the employment contract. For part-timers, leave is typically calculated proportionally to the number of hours worked.
Important Considerations for Employers
For employers, it’s important to comply with the rules around leave salary to avoid legal issues. Here are a few key points for employers to consider:
- Ensure that all employees, regardless of their contract type (full-time or part-time), are aware of their leave entitlements.
- Accurately calculate and pay leave salary based on the components specified in the employee’s contract.
- In case of termination, promptly process leave encashment for unused leave days, based on the legal guidelines.
Other Types of Leave
In addition to annual leave, employees in the UAE are entitled to several other types of leave under:
- Maternity Leave: Female employees are entitled to 60 days of maternity leave, with the first 45 days at full salary and the remaining 15 days at half salary.
- Bereavement Leave: Employees are entitled to paid leave in the event of the death of close family members. The leave duration is typically five days for a spouse, and three days for parents, children, or siblings.
- Parental Leave: New parents (either father or mother) are entitled to five days of paid leave for childcare within six months of a child’s birth.
| Criteria | Details |
| Leave Entitlement | 30 days of annual leave with pay after completing 1 year of service. |
| Leave Entitlement for Less Than 1 Year | 2 days of leave per month for employees with at least 6 months of service. |
| Leave Salary Calculation | Daily Salary = Monthly Salary (Basic + Allowances) ÷ 30 |
| Leave Salary for 30 Days | Example: Monthly Salary = AED 12,000, Leave Salary for 30 days = AED 12,000 |
| Cash Allowance for Unused Leave | Based on Basic Salary if leave is not taken and employment is terminated. |
| Maternity Leave | 60 days: First 45 days at full pay, next 15 days at half pay. |
| Bereavement Leave | 5 days for spouse’s death, 3 days for close family members (parents, children, siblings, etc.). |
| Parental Leave | 5 days for either parent to care for a newborn child within 6 months of birth. |
Carrying Forward Leave
Sometimes life gets busy, and employees can’t take their annual leave within the year. Employees can carry forward unused leave to the next year, subject to employer approval. However, there are limits—typically, employees are advised to use their leave within two years, or else they might lose the right to carry it forward or get cash compensation.
FAQs
1. What is leave salary in the UAE?
Leave salary refers to the full salary an employee continues to receive during their annual leave, which includes both the basic salary and any allowances (such as housing, transportation, etc.) outlined in the employment contract.
2. How is leave salary calculated in the UAE?
Leave salary is calculated by dividing the total monthly salary (basic salary plus allowances) by 30 to get the daily salary. Then, the daily salary is multiplied by the number of leave days the employee is entitled to.
3. How many days of annual leave am I entitled to in the UAE?
Employees are entitled to 30 days of fully paid annual leave after completing one year of continuous service. If you’ve completed six months but less than one year of service, you are entitled to two days of leave per month.
4. What happens if I don’t use my full annual leave?
If you don’t use all your annual leave, you are entitled to cash compensation for any unused leave days if your employment is terminated. The compensation will be based on your basic salary.
5. Are part-time employees entitled to annual leave in the UAE?
Yes, part-time employees are entitled to annual leave, but the number of leave days is calculated based on the number of hours they work. Leave entitlements for part-time employees will be detailed in their employment contract.
Leave salary calculation may seem complex at first, but understanding how it works is essential for both employees and employers. With clear guidelines and transparent communication, both parties can avoid confusion and ensure that workers receive the leave benefits they’re entitled to under UAE law. By following the rules that’s are set out, employees can confidently enjoy their annual leave, knowing that their salary will continue uninterrupted, and employers can ensure compliance with the UAE Labor Law.