UAE HR guide
UAE Annual Leave: Entitlement, Calculation & Examples
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Annual leave for employees in the UAE mainland private sector is governed mainly by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (Article 29) and its implementing regulations. This guide covers mainland private-sector employment only. The DIFC and ADGM free zones, domestic workers and other employment regimes have their own rules.
Need to calculate annual leave?
Use Namya's free UAE Annual Leave Calculator to estimate an employee's annual leave entitlement.
How UAE annual leave works
After one year of service
Once an employee has completed one year of service, the statutory minimum is 30 days of paid annual leave for each year. This is a minimum: a contract or company policy can be more generous.
Between six months and one year
An employee whose service is more than six months but less than one year is entitled to 2 days of annual leave for each month of service.
Less than six months
The law gives no statutory annual leave entitlement before six months of service. An employer may still choose, or agree in the contract, to give leave earlier. That is a more favourable benefit, not a legal requirement.
Part-time employees
Part-time employees are entitled to annual leave based on the hours they actually work, under the rules in the implementing regulations. Their entitlement should not simply be worked out using the full-time calculation, so check the regulations or seek advice for part-time contracts.
Worked example: a full year of service
- Service
- More than one year
- Annual entitlement
- 30 days
- Leave already taken
- 12 days
- Calculation
- 30 − 12
- Remaining balance
- 18 days
This is simplified. Real balances can be affected by days carried forward from earlier years, exact employment dates, unpaid absence and company policies that give more than the statutory minimum.
Calculate Your Employee's Annual LeaveWorked example: an employee in their first year
- Completed service
- 9 months
- Rule
- 2 days per month
- Calculation
- 9 × 2
- Entitlement
- 18 days
The example counts whole completed months. The law doesn't say how to treat a part month in this period, for example 9 months and 20 days. Employers handle this differently, so state your approach in the contract or company policy.
Annual leave pay: an important distinction
1. Pay while taking annual leave
An employee taking annual leave is entitled to their wage for the leave period. It is paid leave, not leave paid at basic salary only.
2. Payment for unused leave when employment ends
When employment ends, the employee is entitled to cash compensation for accrued annual leave they haven't used. This compensation is calculated on the employee's basic wage.
Example: an employee on AED 9,000 basic and AED 4,000 allowances leaves with 10 unused days. Compensation is AED 9,000 ÷ 30 × 10 = AED 3,000. If they had taken those 10 days as leave while employed, they would have received their wage for the period.
What happens to unused annual leave?
- Use it in the year: leave is intended to be taken during the year it is earned.
- Carry forward: an employee may carry leave into the next year with the employer's approval and in line with company regulations.
- Two-year limit for employers: an employer may not prevent an employee from using accrued annual leave for more than two years.
- Cash instead of leave: the law allows an employee to receive payment for unused carried-forward leave, in line with company regulations.
- On termination: unused accrued leave, including leave for the part of the final year worked, is paid on basic wage.
Carry-forward caps, "use it or lose it" rules and similar limits come from company policy, not the law. They must not take away the statutory rights above.
Do public holidays count as annual leave?
Under the statutory default, public holidays set by law or agreement that fall during an employee's annual leave are counted as part of that leave. A contract or company policy can be more favourable.
Example: an employee takes 10 days of leave and one public holiday falls in that period. Under the default, the holiday is one of the 10 days. Under a more generous policy, the employer might deduct only 9 days from the balance.
Can an employer choose when an employee takes leave?
Yes, within limits. The employer may set annual leave dates according to work requirements, in agreement with the employee or on a rotation basis. The employer must notify the employee of the leave date at least one month in advance.
What happens to annual leave when employment ends?
Short answer: the employee is paid for any accrued annual leave they haven't used, calculated on basic wage. This applies whether they resign or the employer ends the contract.
- Unused accrued leave: days built up and not taken, including days carried forward, are paid out.
- Part of the final year: the employee is also entitled to leave for the fraction of the final year they worked.
- Basic wage: the statutory cash payment uses basic wage, not total salary with allowances.
Leave pay is usually settled alongside end-of-service gratuity. See our UAE gratuity calculation guide for that part of a final settlement. Individual cases depend on the contract and dates involved.
Common annual leave questions
How many annual leave days do UAE employees receive?
At least 30 days of paid annual leave for each year of service, once one year of service is completed. Contracts or company policies can give more.
When does an employee become entitled to annual leave?
After completing six months of service. Before six months there is no statutory entitlement, although an employer may grant leave voluntarily.
How is annual leave calculated during the first year?
Where service is more than six months but less than one year, the employee earns 2 days of leave for each month of service. For example, 9 months gives 18 days.
Is annual leave paid at basic salary or full salary?
While on annual leave, the employee receives their full wage for the leave period. Basic wage is used only to calculate payment for unused leave when employment ends.
What happens to unused annual leave?
It can be carried forward with the employer's approval under company regulations, or paid where the rules allow. Unused accrued leave is paid on basic wage when employment ends.
Can annual leave be carried forward?
Yes, with the employer's approval and in line with company regulations. The employer may not prevent an employee from using accrued leave for more than two years.
Can an employer decide when annual leave is taken?
The employer can set leave dates according to work requirements, in agreement with the employee or by rotation, and must give at least one month's notice of the leave date.
What happens to annual leave when an employee resigns?
The employee is paid for unused accrued leave, including leave for the part of the final year worked, calculated on basic wage. Resignation does not cancel that entitlement.
Do UAE public holidays count during annual leave?
Under the statutory default, holidays that fall within annual leave count as part of the leave, unless the contract or company policy is more favourable.
Are part-time employees entitled to annual leave?
Yes. Their entitlement is based on the hours they actually work, under the implementing regulations, rather than the standard full-time calculation.
Do DIFC and ADGM employees follow the same annual leave rules?
No. The DIFC and ADGM free zones have their own employment laws. This guide covers the UAE mainland private sector only.
Managing annual leave shouldn't require another spreadsheet
Namya helps UAE SMEs keep employee records and HR information in one place, including leave requests, approvals and balances. Payroll & WPS is coming soon. For quick estimates, use our free UAE annual leave calculator.
Official sources
- Federal Decree-Law No. 33 of 2021 (UAE Legislation)
- Employment in the private sector (u.ae)
- Ministry of Human Resources & Emiratisation (MOHRE)
Disclaimer: the examples are illustrative. Individual entitlements depend on the employment contract, company policy, the applicable law or free-zone rules and each employee's circumstances. This guide is not legal advice.