Annual Leave in the UAE: Days, Pay and Carry Over

Annual leave is the leave every employee uses and every payroll has to track. The UAE rules are generous and mostly clear, but three points cause most of the questions: what an employee earns in the first year, how far days can be carried over, and why the pay for days taken is not the same as the pay for days cashed in at the end. This guide sets out the current rules for the UAE mainland private sector.

Who these rules cover

The rules come from Federal Decree-Law No. 33 of 2021, the UAE labour law, and its executive regulations, Cabinet Resolution No. 1 of 2022. They apply to private-sector employees on the mainland in every emirate. The DIFC and ADGM free zones, the government sector and domestic workers have their own rules.

How many days the law gives

The entitlement depends on length of service (Article 29):

Service	Annual leave
Less than six months	None yet
More than six months, less than a year	2 days for each month of service
A year or more	At least 30 days a year
The final, part year	Pro rata to the time worked

These are minimums: a contract can give more, never less. Some contracts state the entitlement in working days, such as 22 or 24, instead of days. Whatever the unit, the contract cannot give less time off than the law's minimum; if you are unsure how your contract's figure compares, ask MOHRE.

Leave during probation

Annual leave can be taken during probation if the employer and the employee agree. For the rest of the probation rules, see our guide to probation and replacement rules in the UAE.

Who decides the dates

The employer must tell the employee the dates of their annual leave at least one month in advance. Most employers agree the dates with the employee well before that, which avoids clashes with the work and with family plans.

Pay while on leave

During annual leave, the employee is paid their full wage. The labour law defines the wage more widely than the basic salary: it is the basic wage plus the allowances that come with the job. A worker whose package is AED 4,000 basic and AED 1,500 in cash allowances is paid AED 5,500 for a month on leave, not AED 4,000.

Carrying days over

Unused days can be carried into the next year only with the employer's approval, and the executive regulations cap the carry-over at half of the annual entitlement. On a 30-day entitlement, that is up to 15 days. Instead of carrying days over, the employee can agree to be paid for them, at the wage that applied when the days were earned.

The law also stops leave being blocked for too long: an employer cannot prevent an employee from using leave they have built up over more than two years.

Unused leave at the end of service

When employment ends, the employee is paid for annual leave earned but not taken. This payment is calculated on the basic wage, not the full wage used while on leave. Using a daily rate of the monthly basic divided by 30, an employee leaving with 10 unused days on a basic wage of AED 6,000 is owed 10 × AED 200, which is AED 2,000.

That figure is part of the final settlement, which the employer must pay within 14 days of the contract ending (Article 53), together with the outstanding wages and the end-of-service gratuity.

Public holidays and other leave

Annual leave is separate from public holidays and from the shorter leaves the law adds:

Leave	What the law gives
Public holidays (Article 28)	Paid. An employee who works one gets another day off, or that day's wage plus at least 50% of the basic wage
Bereavement (Article 32)	5 days for a spouse; 3 days for a parent, child, sibling, grandchild or grandparent
Parental (Article 32)	5 working days for either parent, within six months of the birth
Study (Article 32)	10 working days a year to sit exams at an accredited UAE institution, after two years of service

Sick leave and maternity leave have their own rules: see sick leave under UAE labour law and maternity and parental leave in the UAE.

What employers need in place

An accrual that runs every month. The entitlement builds from the sixth month and changes at the first anniversary, so the balance should be calculated, not kept in a spreadsheet someone updates when they remember.

Two rates, clearly separated. Days taken are paid at the full wage; days cashed in at the end are paid on the basic wage. Payroll should hold both, so neither is applied in the wrong place.

A carry-over decision each year. Approving carry-over, capping it at half and recording any agreed cash payment avoids a large, disputed balance at the exit.

Provision for the exit. Unused leave is a liability that sits beside gratuity. Providing for both monthly means the final settlement is funded before it is due.

For the wider picture, see our UAE labour law guide for employers.

The bottom line

UAE private-sector employees earn two days a month after six months' service and at least 30 days a year after the first year. Leave is paid at the full wage, carry-over needs approval and is capped at half, and unused days are paid on the basic wage when employment ends. The rules are straightforward; the work is in keeping an accurate balance for every employee, all year.

When tamdeed runs the employment administration for a company that sponsors its own staff, leave balances and payroll sit on one platform, so the balance on the final settlement is the one the employee has been seeing all along. See how tamdeed runs PEO in the UAE, or for a company with no UAE entity, employer of record.

Sources: Federal Decree-Law No. 33 of 2021, Articles 1, 28, 29, 32 and 53; Cabinet Resolution No. 1 of 2022, Article 19; the UAE Government portal's guidance on types of leave in the private sector. This guide is general information, not legal advice; confirm your own case with MOHRE or a qualified adviser.

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