Annual leave entitlement in the United Arab Emirates
Reviewed by Mellow Editorial Team, HR & payroll content team
Employees in the UAE are entitled to 30 calendar days of paid annual leave per year once they have completed 12 months of continuous service. Before that first year is up, a pro-rated entitlement accrues from day one.
Who is entitled to annual leave
Annual leave under Federal Decree-Law No. 33/2021 (the UAE Labour Law) applies to all private-sector employees, whether UAE nationals or expatriates, working full-time or part-time. Public-sector employees are governed by separate federal or emirate-level regulations, so this article focuses on the private sector.
There is no distinction based on seniority, grade or salary level. All eligible employees earn the same statutory minimum: 30 calendar days once a full year of service is complete.
How leave accrues in the first year
An employee does not have to wait a full year before any leave is owed. Entitlement accrues throughout the year at a rate of 2.5 calendar days per month. An employee who has been with a company for six months has accrued roughly 15 days, even if they cannot yet take a full uninterrupted leave period.
The law permits employers to require that leave is only taken after the probation period ends, but accrual continues regardless. Probation in the UAE can run up to six months, and during that window an employer can restrict when leave is actually used — not whether it accrues.
Taking leave: employer and employee rights
Once the 30-day entitlement is active, the employer has the right to schedule when annual leave is taken, provided the employee receives reasonable notice. An employee cannot unilaterally decide to disappear for 30 days; the employer's operational needs are a legitimate factor.
Equally, the employer cannot indefinitely postpone leave. The law expects leave to be granted within the same year it is earned or, by agreement, carried forward for up to one additional year. Unused leave that is not taken within that carry-forward window does not simply vanish — the employee is entitled to receive a cash payment for the days not taken.
Leave can be split across the year, though at least one continuous block should be taken where possible. In practice, many employers in the UAE allow employees to spread leave flexibly throughout the year, and this works well provided both parties agree and records are kept accurately.
Public holidays during annual leave
If a UAE public holiday falls within a period of annual leave, the extra day is added to the leave — it does not consume a day of the annual entitlement. The UAE observes a number of public holidays each year set by federal and emirate authorities; the exact dates for some (particularly Islamic holidays) are announced on a rolling basis. Employers should track official announcements and adjust leave records accordingly.
Pay during annual leave
Employees must receive their basic wage plus any allowances that form part of their regular remuneration while on annual leave. This is not simply the base salary figure — it includes housing allowance, transport allowance and any other fixed recurring payments that appear on the employment contract. Variable commission or discretionary bonuses would typically not be included, but fixed contractual allowances are.
Salaries in the UAE are paid through the Wage Protection System (WPS), and leave pay should be processed through the same channel on the normal pay cycle. There is no separate "leave pay" mechanism that requires a different calculation run.
Gratuity and annual leave on termination
When employment ends, any accrued but unused annual leave must be paid out in cash, calculated on the employee's basic wage. This payment is separate from end-of-service gratuity. Under Federal Decree-Law No. 33/2021, expatriate employees accumulate an end-of-service gratuity of 21 days' basic wage per year for the first five years of service and 30 days' per year for every year thereafter, capped at a total of two years' pay. That gratuity calculation and the leave encashment run as two distinct figures on the final settlement.
For HR teams managing terminations, the most common error is conflating the two. Keep the calculations separate, document the leave balance clearly in the employee file, and ensure both figures appear as distinct line items on the final settlement sheet.
Record-keeping
The UAE Labour Law requires employers to maintain accurate records of leave taken and balances accrued. In practical terms this means a running leave ledger — whether in your HRIS, a payroll platform like Mellow's UAE payroll solution, or even a well-maintained spreadsheet — that is updated each pay cycle and shared with employees on request.
Disputes over leave balances are among the most frequent complaints filed with the Ministry of Human Resources and Emiratisation. Clear records protect both the employer and the employee if a disagreement arises.
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