Leave Salary Calculation in UAE – Here,s everything you need to know

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Leave salary calculation in UAE is a subject of confusion, for employees and employers alike.Over the previous months, wirestork received numerous queries concerning leave salary calculation in UAE. While there are numerous factors governing the applicability of such calculations, it,s far more important to understand the base factors concerning the applicability of leave salary calculation in UAE.

Leave Salary calculation in UAE is administered by your attested labor contract.

Provisions concerning leave salary calculations are largely administered by the Federal Law No. 8 of 1980 regulating labor relations as amended by Federal Laws Nos. 24 of 1981, 15 of 1985 and 12 of 1986. It,s important to note that for all purposes of reference, the details mentioned in the employment contract alone will matter.

Only when the employment contract is filed with the Labor Department, the worker becomes recognized and it,s only then that he,s entitled to protection by the Labour department.

How is Leave salary calculated in UAE?

Each worker shall be entitled to his basic wage and the housing allowance, if applicable, in respect of his days of annual leave.

Where it was imperative for the work interest to put a worker on duty during all or part of his annual leave, and if the leave days on which he worked were not carried forward to the following year, the employer shall pay him his normal wage plus an allowance in lieu of leave, for the actually worked days, calculated on the basis of his basic wage.

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For every year of service, an employee is entitled to an annual leave of not less than the following:
Two days leave for every month if his service is more than six months and less than a year. 30 days annually if his service exceeds one year. At the end of the service the employee is entitled to an annual leave for the fraction of the last year he spent in service.

Which official holidays are the employee entitled to ?

An employee is entitled to an official holiday with full wage for the following occasion

  • Hijri New Year’s Day one day
  • Gregorian New Year’s Day one day
  • Eid Al Fitr (end of Ramadan) two days
  • Eid Al Ada and Waqfa three days
  • Prophet Mohammed’s Birthday one day
  • Isra and Al Mi’raj one day
  • National Day one day

Are official holidays excluded from Leave salary calculation in UAE?

No. The calculation of duration of annual leave shall include holidays specified by law or by agreement, or by any other day because of sickness if they fall within the leave and shall be deemed to be part thereof.

leave salary calculation in uae

What would be payable to the employee during his annual leave?

Each worker shall be entitled to his basic wage and the housing allowance, if applicable, in respect of his days of annual leave.

Who determines when the leave starts and for how long?

The employer has the right to determine the beginning of the annual leave, and when necessary, he has the right to divide the leave into two sections.
If however, work circumstances require keeping the employee during whole or part of his annual leave and the leave has not been carried over for the following year, then the employer shall pay him his wage in addition to a leave allowance for the day he worked equal to his basic wage.

In all cases, no employee shall be required to work during his annual leave more than once during two consecutive years. In other words, the employer may only defer the annual leave once in two consecutive years and at the same time pay the employee the annual leave wages.

At which point should annual leave wages be paid?

Before taking his annual leave, the employee shall be paid his full wage, plus the wage of his leave days he deserves according to the provision of this law.

Is the employee entitled to payment in lieu of leave if his services are terminated?

The employee is entitled to payment of his wages for his leave if his employment is terminated, or he left his work after the period of notice determined by law. The employee will be entitled to receive wages for the annual leave that he has not taken. Payment will be calculated on the basis of the wages he received at the time when the leave was due.
The employer may fix the date of commencement of annual leave and, if necessary, divide such leave into not more than two periods.

How is Sick leave salary calculated in UAE?

The employee must report to the employer any injuries or illness preventing him from working, within a maximum period of two days.The employee will not be entitled for any sick leave during the probation period.

After a period of three months continuous service following the probation period, the employee is entitled to:

  • Full wage for the first 15 days.
  • Half wage for the next 30 days.
  • Any following period will be without wage.

However, if the employee’s illness is directly caused by his misconduct, he is not entitled to any wage during the sick leave.

Can the employee resign from employment during the sick leave?

The employee may resign from employment during the sick leave and before the completion of 45 days specified by law, provided the cause of resignation was approved by a government physician. In this situation, the employer must pay the employee who resigned, all the wages of which he is entitled for until the end of the 45 days referred to above.

Can the employer terminate the employee from service during his sick or annual leave?

The employer may not terminate the employee from service during his sick leave or during his annual leave. During this period any notice for termination will be considered null and void.

However, the employer is entitled to terminate the employment contract if the employee has exhausted his full sick leave and is not fit to come back to work. In such a case the employee will be entitled for his full gratuity and end of service entitlement according to this law.

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Further, the employee will not be entitled to wages for the days that he has not reported to work after the end of his leave. This will not prejudice the rights of the employer to terminate the employees contract if he fails to report back to work within 7 consecutive days from the date on which he was due back.

How is leave salary calculated in maternity leave entitlements?

A working woman shall be entitled for 45 days maternity leave with full pay to include the period before and after the delivery, provided she has served continuously for not less than one year.

The maternity leave shall be granted with half pay if the woman has not completed one year.

At the end of the maternity leave, a working woman has a right to extend her maternity leave for a maximum of 100 days without pay. This unpaid leave can be continuous or interrupted if the interruption is caused by illness which prevents her from coming to work. The illness must be confirmed by a certified government physician licensed bya the competent health authority.

Maternity leave in either of the above cases shall not be deducted from any other leave for which the woman employee is entitled.

During the 18th months following the delivery, the working woman, who fosters her child has the right to have two daily intervals which do not exceed half an hour each for the purpose of nursing her child. Those two additional intervals shall be considered part of the working hours and no deduction in wages shall be made.

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