Annual leave is one of the most common HR questions in UAE small businesses: how many days staff earn, whether unused days roll over, and how much to pay for leave that is never taken. Here are the rules for private-sector employees and a simple way to keep track.
How much leave employees earn
- After one year of service: 30 days of fully paid annual leave a year.
- Between six months and one year: 2 days for each month worked.
- Part-time employees: leave in proportion to the hours actually worked, as set out in the contract.
Booking leave
- The employer can set leave dates to suit the work, in agreement with the employee, and can rotate leave so the business keeps running.
- The employer should confirm leave dates at least one month in advance.
- Public holidays or other agreed days off that fall inside a leave period count as part of the annual leave, unless the contract or company policy is more generous.
Unused leave and carry-forward
- Unused leave can be carried into the next year only with the employer's agreement and under company policy.
- An employer cannot stop an employee from using accrued leave for more than two years in a row, unless the employee chooses to carry it forward or take cash instead.
- Carried-over days that are paid out are paid on basic salary.
Leave pay when someone leaves
When the contract ends, the employee is paid for all unused annual leave, plus leave earned in the final part-year, based on basic salary. This forms part of the final settlement, which must be paid within 14 days of the contract ending.
Worked example
An employee has a basic salary of AED 4,500 a month and leaves after 2 years and 5 months with 9 unused days from earlier years.
- Leave earned in the final part-year: 30 days × 5 ÷ 12 = 12.5 days.
- Total unused leave: 9 + 12.5 = 21.5 days.
- Daily basic wage: AED 4,500 × 12 ÷ 365 = AED 147.95 (some employers use ÷ 30 = AED 150; follow your policy).
- Leave pay: 21.5 × AED 147.95 = AED 3,181.
Keep a running leave balance
The easiest way to avoid disputes is one sheet per employee showing leave earned each month, leave taken, carry-forward and the balance. Update it every time leave is approved, and share the balance with the employee once a year.
Templates for leave
- Annual Leave Balance Calculator (Excel): entitlement, days taken and balance worked out automatically.
- Leave Tracker (Excel): requests, approvals and days taken by leave type.
- Team Leave Calendar (Excel): see who is away each day.
- Final Settlement Calculator (Excel): includes leave pay when someone leaves.
See all attendance, leave and timesheet templates, and our guide to final settlement in the UAE.
Source: UAE Government portal (u.ae), annual leave, under Federal Decree-Law No. 33 of 2021 and its Implementing Regulations. This guide is general information for mainland private-sector employers, not legal advice. Free zones such as DIFC and ADGM have their own rules.