Annual Leave in the UAE
Annual leave is one of the most valuable parts of your UAE employment — and unused leave can add a meaningful amount to your final settlement. This guide covers entitlement basics, how leave accrues, encashment, and how leave links to gratuity.
Last reviewed: 19 June 2026
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Leave entitlement basics
As general guidance, paid annual leave in the UAE private sector commonly works like this. Always confirm the exact figures against the current labour law and your own contract, which may be more generous.
| Length of service | Common annual leave entitlement |
|---|---|
| More than 6 months, under 1 year | About 2 days of leave per month |
| 1 year or more | Commonly 30 calendar days per year |
| Under 6 months | Generally no annual leave entitlement yet |
These are typical patterns for general guidance, not a statement of the exact legal entitlement for your situation.
How annual leave accrues
Leave builds up over the year as you work. If you do not use all of it, the balance is usually carried as accrued leave, which is why employees often have a number of unused days when they leave a role.
Leave encashment
Encashment means being paid for accrued leave you did not take. It is generally calculated on your salary — commonly the basic salary — for the number of outstanding days:
Check your contract, because some employers calculate encashment differently or include certain allowances.
Leave and your final settlement
Unused annual leave is normally encashed and paid as part of your final settlement, together with gratuity and any unpaid salary. Keeping an accurate record of your leave balance helps you check the employer's figure.
How leave links to gratuity
Paid leave counts; unpaid leave usually does not
Paid annual leave is part of your normal service, so it counts toward your length of service for gratuity. Periods of unpaid leave are generally excluded from the qualifying service used in the gratuity formula. Our calculator lets you subtract unpaid leave days.
Worked example
An employee with a basic salary of AED 9,000 leaves with 12 unused annual leave days:
Leave encashment example
This AED 3,600 would typically be added to gratuity and unpaid salary in the final settlement.
Estimate your gratuity too
Leave encashment is one part — estimate the gratuity portion of your settlement now.
Open the CalculatorFrequently asked questions
Official sources & further reading
Confirm details with the UAE Government portal (u.ae) and MOHRE. On this site, see the final settlement guide, the basic vs gross salary explainer, and the gratuity guide.