Annual Leave in UAE -New Labour Law Rules and Entitlement (Updated 2023)

UAE Annual Leave Entitlement and Rules: Your Complete Guide

Most of us look forward to the annual leave in UAE. This is the time for us to relax and come back energized. However, not many of us are able to understand what are the laws governing annual leave in UAE as per UAE Labour Law. If you are an employee or employer, it is better to understand the laws surrounding Annual Leave.

The new labour law – Federal Decree-Law No. 33 of 2021 on the regulation of labour relations – has updated the regulations for the private sector in the UAE on the computation of Annual Leave.

The new UAE Labour Law – Federal Decree-Law No. 33 of 2021 – has come into effect from February 2, 2022, replacing the current Federal Law No. 8 of 1980 and its amendments.

Employees are allowed to take annual leave if they have worked for six months or more. The UAE Labor Law states that employees are entitled to a fully paid annual leave of 30 days if they have completed one year of service. If they have completed six months but not yet a full year, they are entitled to 2 days of leave per month. If an employee leaves their job before using all their annual leave, they will receive leave for the portion of the last year they worked.

Article 29 of the new Federal Decree-Law No. 33 of 2021

As per the Article 29 of the New Labour Law on Annual Leave:

  1. Without prejudice to the worker’s acquired rights for the period preceding the date of enforcement of the provisions of this Decree-Law, the worker shall be entitled to an annual leave with full wage, of not less than: a. Thirty days for each year of extended service; b. Two days for each month if his service term is more than six months and less than a year; c. A leave for parts of the last year he spent at work if his service is ended before using his annual leave balance.
  2. The part-time worker shall be entitled to an annual leave according to the actual working hours the worker spends working for the employer and its period shall be defined in the employment contract, in accordance with what is stipulated in the Implementing Regulation hereof.
  3. The employer may agree to grant the worker a leave from his annual leave balance during the probationary period, while the worker shall reserve his right to be compensated for the remainder of his annual leave balance in case he does not pass the probationary period.
  4. The worker shall obtain his leave in its entitlement year and the employer may specify the dates of these leaves according to work requirements and in agreement with the worker, or grant them alternately among the establishment’s workers, in order to secure its work progress. e employer shall notify the worker of the specified date for his leave within a sufficient time of not less than a month.
  5. The worker may, with the approval of his employer and in accordance with the applicable regulations at the establishment, carry forward his annual leave balance or days thereof to the following year.
  6. The worker shall be entitled to the wage for the period of his annual leave.
  7. The holidays prescribed by law or by agreement are included in the calculation of the annual leave period if they fall within the annual leave of the worker and they form a part thereof, unless the employment contract or the regulations in force at the establishment provide for anything that is more useful for the worker.
  8. The employer may not prevent the worker from benefiting from his annual leave accrued for more than two years, unless the worker wishes to carry it forward or receive a cash allowance for it, in accordance with the regulations in force at the establishment and the Implementing Regulation hereof.
  9. The worker shall be entitled to a wage for the accrued leave days if he quits the work before using them, regardless of the leave duration, with respect to the period for which he did not obtain his leave. He shall also be entitled to receive leave wage for parts of the year in proportion to the period he spent in work and it shall be calculated according to the basic wage.
  10. The Implementing Regulation hereof defines the rules and conditions for regulating leaves and their compensation.

Leave salary calculation in the UAE in 2023

If you’ve completed 12 months of service with a company and take 30 days of annual leave, your salary during this leave will be your full monthly salary. This includes your basic salary plus any allowances you usually receive.


Rights of an employee if they are not paid during their leave

If your employer doesn’t pay your full salary during annual leave when you’ve completed 12 months of service, you have the right to file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE). They will help resolve the issue, and if needed, the matter may go to the labor court to ensure you receive the correct compensation according to the law.


Rules for Using Annual Leaves in UAE:

  • You must use your leaves in the year you’re entitled to them. Your employer may set the dates for your leave, but they must inform you at least one month in advance.
  • With your employer’s consent, you can carry over unused annual leave to the next year, and you’ll be paid for the days you worked during the leave based on your basic salary.
  • Employers cannot prevent you from using your accrued leave for more than two years. If your employment ends, any unused leaves will be calculated based on your basic salary only.
  • The duration of your annual leave will include official holidays and sick leaves if they occur during your leave period, unless your contract or company’s regulations state otherwise.

If you face any issues with your annual leave or salary, you can file a complaint through the MOHRE website or call their helpline at 600590000. They are there to help you resolve any disputes with your employer.


Leave Encashment in UAE

Article 29(8) of the UAE Labor Law states that an employer cannot prevent an employee from using their accumulated annual leave for more than two years, unless the employee chooses to carry it over or receive compensation instead, as specified by the Establishment bylaws and Executive Regulations.

As per the Article 29 of the New Labour Law on Annual Leave clause 8 and 9:

  • The employer may not prevent the worker from benefiting from his annual leave accrued for more than two years, unless the worker wishes to carry it forward or receive a cash allowance for it, in accordance with the regulations in force at the establishment and the Implementing Regulation hereof.
  • The worker shall be entitled to a wage for the accrued leave days if he quits the work before using them, regardless of the leave duration, with respect to the period for which he did not obtain his leave. He shall also be entitled to receive leave wage for parts of the year in proportion to the period he spent in work and it shall be calculated according to the basic wage.

As per the Article (19) of Cabinet Resolution No 1 of 2022 – carrying forward annual leaves or Receiving cash allowance thereof:

  • The worker may carry forward not more than half of the annual leave to the following year, or he may agree with the employer to receive a cash allowance thereof, according to the wage he receives at the time of his entitlement to the leave.
  • If the worker’s service ends, he shall be paid a cash allowance for the balance of his legally due annual leave, according to the basic wage.

Understanding the rules and entitlements surrounding annual leave in the UAE is crucial for both employees and employers. The UAE Labor Law, specifically Article 29 of the new Federal Decree-Law No. 33 of 2021, outlines the provisions for annual leave. Employees have the right to 30 calendar days of annual leave each year in the UAE. They can carry over a maximum of half of their annual leave to the following year or receive compensation in lieu of it, subject to the regulations set by the employer and the provisions of the UAE Labor Law.

Remember to always consult the UAE Labor Law and refer to the specific regulations in force at your establishment for accurate and up-to-date information regarding annual leave entitlement and rules.


Frequently Asked Questions FAQS on Annual Leave in UAE

What happens if an employee leaves their job before utilizing their annual leave? 

In such cases, the employee is entitled to receive payment for the accrued leave days, regardless of the leave duration. The payment is calculated based on the basic wage.

Can part-time employees avail annual leave? 

Yes, part-time employees are entitled to annual leave based on the actual working hours they spend for the employer, as specified in their employment contract and in accordance with the applicable regulations mentioned in the Implementing Regulation.

Can employees carry forward their unused annual leave to the following year?

Yes, with the approval of the employer and in accordance with the establishment’s regulations, employees can carry forward their unused annual leave balance or days to the following year.

Are public holidays included in the calculation of the annual leave period?

Yes, public holidays specified by law or agreement are included in the calculation of the annual leave period if they fall within the employee’s annual leave and are considered part of the leave unless the employment contract or establishment’s regulations state otherwise.

Can an employer prevent an employee from using their accrued annual leave for more than two years? 

No, according to the UAE Labor Law, an employer cannot prevent an employee from utilizing their accumulated annual leave for more than two years, unless the employee chooses to carry it forward or receive a cash allowance for it, as per the regulations in force at the establishment and the Implementing Regulation.

What are the new regulations for annual leave in the UAE in 2023?

In 2023, a new law was introduced in the UAE that allows workers to carry forward unused annual leave or a portion of it if agreed upon with the employer. Alternatively, workers may also choose to receive a cash allowance for their unused leave, subject to agreement with the company.

How is annual leave calculated according to the UAE labor law?

As per the UAE Labor Law, workers are entitled to a fully paid annual leave based on the following criteria:
30 days if they have completed one year of service.
2 days per month if they have completed at least six months of service but less than one year.

Deena

Human Resource professional and writer.

61 thoughts on “Annual Leave in UAE -New Labour Law Rules and Entitlement (Updated 2023)

  1. Dear Deena,
    I seek you guidance for below case.

    I had 10 no. of annual leaves accrued before 26-07-2023 whereas 6 more days added up affterwards.

    Lets say if I ask my employee for leave encashment, does it mean that I have a right to claim 10 no. of days encashed on full leave while 6 no. of days on basic salary.

    As my organization was granting full leave encashment in 2023 but now no encahsment is being allowed & I am afraid that they will apply basic salary on all the leave accumulated under my account.

    1. Hi, before July 26, 2023, you accrued 10 annual leave days, with an additional 6 days afterward. If you request leave encashment, your entitlement depends on company policy. Given a recent change in policy disallowing full leave encashment, it’s likely all accrued leave will be subject to the new policy. Clarify with HR for specifics.

  2. Hi. I completed my first year of employment on 31st Dec 2023. I did not take any leave during 2023 but my manager does not allow carry forward of leave days so I still have the full 30 days unused. Is it legal for them to forfeit the 30 days incurred in my first year?

    1. Hi, Company policies vary regarding the forfeiture of accrued leave days. To clarify, you should consult with your HR department.

  3. I passed my non-renewal of contract letter one month before it ends on February 26 this year. Can i still apply for my remaining annual leave days (4 days) this month before my last day which will be on feb. 26?

    1. Yes, you can typically apply for your remaining annual leave days. However it’s advisable to check with your employer’s policies or consult with HR to confirm the process and eligibility.

  4. Hi, Typically, our company works from Monday to Friday. However, if there’s an urgent task, we may need to work on Saturdays. Our employees usually don’t take continuous annual leave for 30 days.

    One employee requested to take annual leave from Monday to Saturday, with a deduction of 6 days from the leave balance. While management approve the leave, but require a deduction of 7 days instead including the Sunday since annual leave based on Calendar days. please confirm which is correct.

    1. Hi, The correct method for deducting annual leave depends on company policy and local labor laws. If annual leave is based on calendar days, then deducting 7 days including Sunday is correct. If the policy specifies that beginning and end of the weekends are not included, then deducting 6 days may be appropriate. Always align with the established guidelines to ensure consistency and fairness.

  5. Hi. Need clarity, annual leave settlement must include, 1 Basic salary, 2 House allowance, 3 Vehicle allowance + any other allowance OR only basic salary. Please share the article describing the full calculation. Our company is giving only Basic salary and housing allowance.

    1. Hi, For annual leave settlement in the UAE, it should generally include:
      1. Basic Salary
      2. Housing Allowance
      3. Other fixed allowances as per the employment contract.
      If your company is only offering basic salary and housing allowance, consult your contract and consider seeking advice from the UAE Ministry of Human Resources & Emiratisation (MOHRE) for clarity.

  6. Hello, i have a question. last year i have 14 days left that they have forwarded to 2023.
    then this year the company requested me to not take the leave and they will pay as compensation. my salary in total is 3500 per month and the agreed leave days they will pay is 40 days.
    how much should i get from them ?

    1. Hi, To determine the compensation for the 40 days of leave:
      Using the daily rate method, it’s calculated as 116.67 AED/day, totaling 4,666.80 AED for 40 days. However, some companies might base leave encashment on basic pay as per their policy.

  7. Hi does an employee on maternity leave days will also built up or accrue leave days on the duration that she is not working?
    like if she will not work for 1 year, aside from using up already her annual leave + maternity leave days, does it mean that she will still accrue 30 days of annual leave even if not working for same year?

    1. Hi, Typically, during maternity leave, an employee does not accrue additional annual leave days for the period she’s not working. So, if she’s on a one-year maternity leave, she won’t accrue extra annual leave days for that year. Please refer your company leave policy.

  8. Please assist:
    If a full time employee normally works Mon-Friday only (office job) and takes leave for two weeks; e.g is away for two working weeks Mon-Fri. How many leave days does this count for? Do we count from first day of leave (first Monday out of office) to return date (following Monday two weeks later) which is 14 days?
    Or it counts for 12 days?
    Same question: If employee takes Wed-Fri off, does this count for 3 days or 5 days (until return to work following Monday). Thank you.

    1. Hi, The calculation of leave days, whether for a two-week leave from Monday to Friday or for midweek leave from Wednesday to Friday, is subject to your company’s policy. The policy may specify whether leave is calculated based on calendar days or working days.

      1. If the leave calculation is calendar days?
        1) An employee takes leave from Monday to Friday, do we consider just 5 days or include one of the weekend as well and consider 7 days?
        2) If employee takes Wed-Fri off, does this count for 3 days or 5 days (until return to work following Monday)?

        1. Hi, If leave calculation is calendar days, Monday to Friday is considered 5 days. Weekends are not included unless specified otherwise.

          Wed-Fri off counts as 3 days, not 5, until the return to work on Monday.

  9. hi
    I have start job with a company I have my own visa than after 7 month the made work permit for me I went for vacation, but they give me only 30% of my salary. include my work permit I finished almost 13 months here than I went vacation now i don’t know what to do.

    1. Hi, it’s important to talk to your employer about the low salary payment during your vacation and any other concerns you may have. It might be a misunderstanding that can be resolved through communication with your employer. If that doesn’t work, you may consider seeking advice from a labor authority or legal counsel to understand your rights and options in the UAE.

  10. Hi,
    I have resigned from my current employer and I do have some annual leaves in my account to take. Will the remaining annual leaves be added to gratuity as a basic paid or fully paid ?

    1. Hi, When you resign from your job, any unused annual leave you have left is usually included in your gratuity. This means you’ll be compensated for those remaining leave days, and the payment is based on your basic salary.

  11. Hi,

    kindly help me with my issue, i have completed 2 years in my company and did not take annual leave, but I’ll be taking my leave this coming months. I can i ask my company to pay my un accumulated annual leave which basically 2 months.

    Thank you.

    1. Hi, you can inquire about being paid for your unused annual leave by reviewing your company’s policies and speaking with your HR department. Please note that employment laws and company policies may vary, so it’s advisable to consult with HR to understand your specific situation.

  12. I have joined one company on 01.03.2023, now I would like to go on vacation for 10 days after 6 months so may I can get leave salary after 6 months and how it will be calculated. If I did not get leave salary may I can get salary for these 10 days as present days against my leave salaries days.

    1. Hi, Whether you can get leave salary or salary for your 10-day vacation after 6 months depends on your company’s policies and your employment contract. Check with your HR department for specific details.

    1. Hi, If you take annual leave after 12 months of work, you get your full monthly salary, which includes basic pay and allowances. But if you leave your job and want to be paid for unused annual leave, you’ll only get your basic pay, not the allowances. Checking your company’s policies is the best way to know how they calculate your leave salary.

  13. HI, I joined to the company before a 6 month. If I leave the job am I entitled to cash in liu for annual leave days earned. That means 15 annual leave days in cash ? Pls advise.

    1. Hi, Your eligibility for cash in lieu of annual leave after six months of employment depends on your employment contract and your employer’s policies. You may have earned a portion of your annual leave, but whether you can receive cash for it or not is determined by your specific circumstances and company policies. It’s best to check with your HR department for the most accurate information.

  14. Hello,

    Could you please help me clarify, based on the following statement from the contract, how many calendar days of vacation am I entitled to per year: “The holiday year is the calendar year, 1st January to 31st December. Your Annual Leave (paid holiday) entitlement is 24 working days per annum.”

    Thank you.

    1. Hi, This calculation assumes that weekends (Saturday and Sunday) are not counted as working days. However you may clarify with your HR Department.

        1. Hi, I’m sorry, but I didn’t quite understand your query. Could you please clarify?

  15. Is sick leave included in annual leave or it is separate? is it 30 annual leave + sick leave? If yes, what is the number of sick leave that can be availed?

    1. Hi, In the UAE, sick leave and annual leave are separate, with typically 30 days of annual leave and a specific number of sick leave days, usually 15 days with full pay and 30 days with half pay, depending on company policies and labor laws.

  16. Hi,

    My Question is regarding 2nd year annual leave, that the leave calculation cycle will start from the date of rejoining after first leave or will it’s calculation start from the date of my joining?

    Example: For example, my date of joining is 01/08/2022 and I got annual leave from 01/09/2023 to 30/09/2023. So, as per my question, my next annual leave will be from 01/09/2024 to 30/09/2024 or its calculation period of twelve month will restart on my last rejoining of 01/10/2023 and then annual will start from 01/10/2024 to 30/10/2024? Please calrify.

    1. Hi, The calculation of your annual leave entitlement typically depends on your employer’s policies and local labor laws. In many cases, annual leave is calculated on a rolling basis, which means it’s based on a 12-month period starting from your date of joining or your employment anniversary date.

  17. Hi
    If i have taken excess advance leave in 4 years ( i have received 4 full salary in these years) and 5th year i have resigned do i get the leave salary after resignation, if so will i be getting full salary or only basic.

  18. Hi
    If i have taken excess advance leave in 4 years ( i have received 4 full salary in these years) and 5th year i have resigned do i get the leave salary after resignation, if so will i be getting full salary or only basic.

    1. Hi, Whether you receive leave salary after resigning for excess leave and whether it’s based on your full salary or just your basic salary depends on your employment contract and company policies. Review your contract and consult HR for specific details.

  19. Hi! If the worker decided not to take the leave, what is the calculation for the leave encashment? Would it be full salary or basic salary only? Thank you

    1. Hi, Leave encashment is usually calculated based on an employee’s basic salary. So, if a worker decides not to take their leave, they would typically receive an amount based on their basic salary for the unused leave days. Some companies may use the full salary (including allowances) for this calculation, but it depends on the company’s rules and local labor laws.

    1. Hi, I would recommend you to check your employment contract and company leave policy. You may also ask your employer for details about your leave entitlement.

  20. I took vacation for 2 months for 2 years and my company gave me 2 months leave salary before i go , so my question is when i come back from vacation do i will receive regular salary for that 2 months of vacation ?

    1. Hi, it’s advisable to clarify this with your company’s HR department or your supervisor to get accurate information based on your company’s policies.

  21. Hi, could you clarify something for me? After completing one year of employment, I now receive 30 calendar days of annual leave, which equates to 22 working days off. Previously, I had 25 working days off. Why is my annual leave reduced after a year of service?

    I’m finding it very hard to make sense..

    1. Hi, This change might be because of your company’s rules about how leave works as you spend more time with them. It’s a good idea to talk to your HR department to get a clear picture of why this change happened and how it affects your time off.

  22. An employee has accumulated leave of 30 days in one calendar year. At the start of the Next Calendar Year, he has got an increment in his Gross Salary. Does the provision of the accumulated 30 Days leaves upto last year, be recalculated as per the new gross salary or basic salary

    1. Hi, The provision of the accumulated 30 days of leave up to the last year is typically recalculated based on the new gross salary. When an employee receives an increment in their gross salary, it affects various aspects of their employment, including benefits like leave calculations. However you may consult your company for the company’s leave policy to know how the leave provisions are made.

  23. IN THE CASE THAT THE WORKER/EMPLOYEES ARE BEING CALLED TO WORK , WHAT ARE THE COMPUTATIONS OF THE WAGE TO BE PAID OF WHILE WORKING DURING HIS/HER ANNUAL LEAVE?

    DOES THE COMPANY CAN FORCE THE WORKERS/EMPLOYEES TO WORK? ARE THE WORKERS/EMPLOYEES ARE OBLIGED TO WORK TOO.

    1. Hi, Employees in the UAE have the right to annual leave for rest and personal time off.
      If an employer asks an employee to work during annual leave, it should be with the employee’s agreement.
      The employee should be compensated with their regular wage and any applicable allowances.

      1. If an employee worked over a year plus before 2years contract ends but leaves UEA can he still apply for his annual leave entitlement from his employers ?

        1. Hi, If the employee has accrued annual leave during their time working (over a year), they might be able to apply for it before leaving, depending on the employment contract and UAE laws. They should check their contract and talk to their HR department for the specific rules.

    2. If i have completed my two years contract and i renew how many months do i have to wait to ask for my vacation

      1. Hi, After renewing your two-year contract in the UAE, you usually have to wait until you’ve earned enough leave before you can request your vacation.

  24. what is the meaning of “The worker shall be entitled to the wage for the period of his annual leave”. Does this mean that all the leave days balance as at 31-01-2022 will be paid on Basic+HRA and from Feb 2022 onwards the newly accrued leave will be paid as per full salary, or All the OLD leave balance + New leave days will be paid as per the full salary when the employee goes on leave.

    1. Hi, I would request you to check with your company and to refer to your company leave policy.

    2. Hi
      Please clarify this frustration on mine.
      Can the employer divde my number of leave day and force me to only take 4 consecutive days of annual leave at the time?

      1. Hi, You should refer to your employment contract or company policies and consult with HR if there are concerns.

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