TRW & Co · Employment law
Annual Leave Under UAE Labour Law
Under annual leave UAE rules, a full-time private-sector employee earns 30 days of paid leave for each year of service, and two days a month between six months and one year. Leave can be carried over with approval, paid out on exit on the basic wage, and sits alongside public holidays and other statutory leave.
Key pointThe Executive Regulations cap carry-over at half of the annual entitlement and calculate payment for unused leave on exit on the basic wage, so undocumented, growing leave balances are one of the most predictable sources of end-of-employment disputes.
At a glance
30 days per year
After one year of service, full-time private-sector employees are entitled to 30 days of paid annual leave for each year under the federal Labour Law.
Two days a month
Employees with more than six months but less than one year of service earn two days of annual leave for each month worked.
Carry-over up to half
With employer approval, employees may carry leave into the next year; the Executive Regulations limit carry-over to half of the annual entitlement.
Paid out on exit
Accrued, untaken leave must be paid when employment ends, calculated on the basic wage and settled with other dues within 14 days.
DIFC and ADGM differ
The financial free zones apply their own regimes, each giving 20 working days of annual leave with different carry-over and payment rules.
Swipe or scroll →
Annual leave UAE law gives a full-time private-sector employee 30 calendar days of paid leave for each year of service, once the first year is complete. An employee with more than six months but less than a year earns two days per month. Part-time staff earn leave in proportion to their hours, and public holidays are additional.
This guide answers the questions employers and employees actually ask: how leave accrues, who decides when it is taken, how much can be carried over, when unused leave can be paid out, how it interacts with notice, public holidays and sick leave, and how the DIFC and ADGM differ. It is based on the federal Labour Law and its Executive Regulations as published by the government.
The short answer: annual leave UAE entitlements at a glance
| Situation | Entitlement | Notes |
|---|---|---|
| Less than six months' service | No statutory annual leave yet | Employer may grant leave by policy |
| Six months to one year | Two days for each month of service | Applies to full-time employees |
| One year or more | 30 days per year of service | Calendar days under the federal law |
| Part-time employees | Pro rata to actual hours worked | Converted into working days by the Executive Regulations |
| Public holidays | Paid, in addition to annual leave | Set by Cabinet resolution |
| DIFC and ADGM | Separate regimes | Each provides 20 working days per year |
These are minimums. A contract or policy can give more leave but cannot give less, and any term that tries to waive statutory leave is void.
Where the rules come from
Annual leave is governed by Federal Decree-Law No. 33 of 2021 Regulating Labour Relations and the Executive Regulations issued by Cabinet Resolution No. 1 of 2022. MOHRE publishes a consolidated text of the Labour Law with its amendments, and the government portal summarises the rules on its annual leave page.
The federal rules apply on the mainland and in most free zones. The DIFC Employment Law and the ADGM Employment Regulations set their own leave rules, measured in working days rather than calendar days, and their own rules on carry-over and payment on termination.
For a wider view of hours, rest days and other leave types, see our working time and leave practice page.
Free zones, the DIFC and the ADGM
For a free zone employer outside the financial centres, annual leave UAE rules are the federal ones: the free zone authority handles registration and visas, but the leave entitlement comes from the Labour Law. Some free zones publish their own employment guidance, which should be read alongside the federal text rather than instead of it.
In the DIFC and ADGM, the position is different. Both regimes give 20 working days of annual leave a year, accruing during the year, and each sets its own rules on carrying leave forward and paying for untaken leave on termination. Our guides to DIFC employment law and ADGM employment regulations explain those regimes.
How annual leave accrues
Accrual depends on length of service. During the first six months there is no statutory entitlement, although many employers allow leave by policy or advance it. From six months to the end of the first year, the employee earns two days per month. After the first year, the full 30 days applies for each year of service.
Days of unpaid leave or unauthorised absence can affect how service is counted, so keep accurate attendance records. When employment ends part way through a year, the employee is entitled to pay for the leave days accrued in that final period.
For part-time employees, the Executive Regulations convert contracted hours into equivalent leave days. Where the calculation produces part of a day, it is rounded in the employee's favour.
Who decides when leave is taken?
The law expects leave to be taken in the year in which it falls due. The employer sets the dates according to work requirements, after agreeing them with the employee, or by rotation among staff, and must notify the employee of the dates at least one month in advance.
An employer cannot prevent an employee from using accrued leave for more than two years, unless the employee has chosen to carry it forward or receive payment instead under the rules below. A policy that routinely blocks leave in busy periods should therefore include a mechanism to ensure staff can actually take it.
Annual leave also interacts with notice. If notice of termination is given while an employee is on leave, the notice period starts only from the day after the employee is due back. Employers who serve notice during leave should plan for that delay.
What a good leave policy says
The law sets the floor, but the day-to-day annual leave UAE employees experience is shaped by the employer's policy. A useful policy explains how to request leave, how far in advance, who approves it, how blackout periods work, and how conflicting requests are resolved fairly.
It should also say how leave accrues in the first year, whether leave can be advanced before it is earned, how carry-over is requested and approved, and how balances are reported to employees. Clear rules reduce friction and give the employer evidence if a dispute arises later.
Carry-over and payment in lieu
This is the part of annual leave UAE employers most often get wrong. Three different situations need to be kept apart.
- Carrying leave forward. With the employer's approval, an employee may carry leave into the following year. The Executive Regulations limit carry-over to up to half of the annual entitlement.
- Payment in lieu during employment. Instead of carrying leave forward, the employee and employer may agree a cash payment for unused days. The Regulations base that payment on the wage at the time the leave fell due.
- Payment on termination. When employment ends, the employee is entitled to payment for accrued but untaken leave. The Regulations calculate it on the basic wage.
- Record the choice. Document each carry-over or payment in writing, signed by the employee, so there is no later dispute over balances.
- Reconcile at exit. Include the leave balance in the final settlement, payable with other dues within 14 days of the contract ending.
A leave balance that grows year after year is a liability on the balance sheet and a dispute in waiting. Because exit payouts are calculated on basic wage and claims can be brought within two years of employment ending, employers should reconcile balances annually and require written records of every carry-over and cash payment.
Public holidays and other leave
Public holidays
Employees are entitled to paid leave on the official holidays set by Cabinet resolution, which are additional to annual leave. If an employee is required to work on a public holiday, the employer must give a substitute rest day or pay the wage for that day plus at least 50 per cent of the basic wage for it. Whether a holiday that falls inside a period of annual leave extends that leave depends on the applicable rules and your policy, so state the position in writing.
Sick leave and maternity leave
Sick leave runs up to 90 days a year, continuous or intermittent, subject to conditions such as a medical report: the first 15 days at full pay, the next 30 at half pay and the remainder unpaid. Maternity leave is 60 days, 45 at full pay and 15 at half pay.
These are separate entitlements and do not reduce annual leave. Our guide to maternity and parental leave in the UAE explains the family leave rules in more detail.
Bereavement, parental and study leave
The Labour Law also provides short paid bereavement leave, parental leave after a child's birth and study leave for exams, subject to conditions in the Executive Regulations. These can be combined with annual leave.
Calculating annual leave UAE pay and payouts
Annual leave is paid leave. The bigger calculation question arises when unused days are paid out. On termination, the Regulations use the basic wage. The published law does not prescribe a single divisor for converting a monthly wage into a daily rate, and practice varies, so state the method in your contract or leave policy.
Illustrative calculation. An employee leaves with 12 accrued, untaken days and a monthly basic wage of AED 9,000. If the policy converts monthly basic wage to a daily rate by dividing by 30, the daily rate is AED 300 and the payout is AED 3,600. If it divides annual basic wage by 365, the daily rate is about AED 295.89 and the payout about AED 3,550.68. The figures are illustrative only.
For payment in lieu during employment, the Regulations refer to the wage at the time the leave fell due. Where leave accrued over several years at different salaries, keep year-by-year records.
Travel home and leave tickets
Many expatriate packages include an annual air ticket or ticket allowance. That is generally a contractual benefit rather than a statutory part of annual leave UAE law, so its value, frequency and whether it extends to family members depend on the contract or policy. State whether an unused ticket entitlement is paid out at the end of employment, because silence on this point is a common source of argument.
Employers should also remind staff travelling during leave about residence visa validity and any re-entry requirements, particularly where leave is combined with unpaid leave for a long trip.
Illustrative scenario: a growing leave balance
This scenario is illustrative only and does not describe a real client or case.
A project manager at a Dubai mainland contractor has taken only a few days of leave in three years because of site deadlines. Nothing has been signed about carry-over. When she resigns, she claims payment for the whole balance.
The employer argues the leave lapsed. That argument is weak: the law prevents employers from blocking leave for more than two years and entitles departing employees to pay for accrued leave, and the employer has no written carry-over or payment records. The more productive conversation is about the correct balance and calculation, using the basic wage, and settling it within the final dues.
The case also shows the value of evidence. Had the employer offered leave dates in writing and recorded the manager's decision to defer them, the conversation would have been shorter and the risk of a MOHRE complaint lower.
Going forward, the employer adopts a policy that schedules leave with a month's notice, records any carry-over of up to half the entitlement, and reconciles balances each year.
Risks and common mistakes
Assuming unused leave simply lapses
Some employers operate a use-it-or-lose-it policy. Under the federal law, that is risky: the employer cannot prevent an employee from taking accrued leave for more than two years unless the employee chose to carry it forward or be paid, and accrued leave must be paid on exit. A lapse rule should be backed by evidence that the employee was offered and declined leave, and by written carry-over records.
Paying out on the wrong wage
Payment on termination uses the basic wage, while payment in lieu during employment refers to the wage at the time the leave fell due. Mixing these up, or using gross pay in one case and basic in another without a policy, invites dispute. Set out the basis in the contract or handbook and apply it consistently.
Serving notice during leave
Notice served while the employee is on annual leave does not run until the day after the employee is due to return. Employers who time notice for a holiday period often find the termination date later than expected, which affects wages, visas and handover.
Imposing leave during a slow period or shutdown
Employers sometimes direct all staff to take leave during a seasonal slowdown or office closure. The law lets the employer set leave dates according to work requirements, but expects agreement with the employee or a rotation system, and at least one month's notice of the dates. A sudden, unilateral instruction to use leave is open to challenge. Plan closures early, consult staff, give written notice, and treat employees with insufficient accrued leave fairly rather than deducting pay.
Ignoring part-time pro-rating
Part-time employees are entitled to leave, but in proportion to their hours. Employers sometimes either deny part-time staff leave altogether or give them the full-time entitlement by default. Both are wrong. Set out the conversion method in the part-time contract, apply the Executive Regulations' rounding in the employee's favour, and keep records of hours.
Applying federal rules in the DIFC or ADGM
Employers in the financial centres follow their own regimes, with leave measured in working days and different rules on carry-over and payment on termination. A group handbook built on the federal rules will be wrong for those entities.
What to do next: an annual leave checklist
- Confirm which regime applies: federal, DIFC or ADGM.
- State the leave entitlement, accrual and calculation method in contracts and policy.
- Schedule leave with at least a month's notice and keep records of agreement.
- Record every carry-over (up to half the entitlement) and every payment in lieu in writing.
- Reconcile balances annually and include them in final settlements within 14 days of exit.
TRW & Co reviews leave policies, handbooks and exit settlements as part of our employment policies work, and advises on employment disputes when balances are contested. Related guides cover end-of-service gratuity calculation and employment contracts in the UAE. Where representation before UAE onshore courts or the DIFC/ADGM Courts is required, we work alongside locally licensed advocates and registered practitioners. Contact us at info@trw.co or +971 58 942 1012.
Frequently asked questions
01How many days of annual leave do I get in the UAE?
Under the federal Labour Law, a full-time private-sector employee is entitled to 30 days of paid annual leave for each year of service after completing one year. Between six months and one year of service, the entitlement is two days per month. Part-time employees accrue leave in proportion to their hours. Public holidays are additional. Employees in the DIFC and ADGM follow their own regimes, which give 20 working days a year. Contracts can be more generous but cannot reduce the statutory minimum.
02Can my employer refuse my annual leave?
The employer can set the timing of leave according to work needs, after agreeing with the employee, and must give at least one month's notice of the dates. But it cannot prevent an employee from using accrued leave for more than two years unless the employee has chosen to carry it forward or receive payment instead. Repeated refusals without a mechanism to take the leave later expose the employer to claims, especially at the end of employment.
03Can I carry forward unused annual leave in the UAE?
Yes, with your employer's approval. The Executive Regulations limit carry-over to up to half of the annual entitlement into the following year. Alternatively, you and your employer can agree a cash payment instead of carrying the days forward, based on the wage at the time the leave fell due. Make sure any carry-over or payment is recorded in writing, as undocumented arrangements are a common source of disputes when employment ends.
04Will I be paid for unused leave when I leave my job?
Yes. Under the federal Labour Law, an employee who leaves before using accrued leave is entitled to be paid for those days, including leave accrued in the final part-year. The Executive Regulations calculate this on the basic wage. The payment forms part of the final dues, which must be paid within 14 days of the contract ending. Claims for unpaid leave can be brought through MOHRE and, if unresolved, the courts, within two years of the end of employment.
05Do public holidays count as annual leave in the UAE?
No. Official public holidays, set each year by Cabinet resolution, are separate paid days off in addition to annual leave. If you are required to work on a public holiday, your employer must give you a substitute rest day or pay your wage for that day plus at least 50 per cent of your basic wage for it. Check each year's announcement for how holidays that fall during annual leave are treated.
06How is annual leave calculated for part-time employees?
Part-time employees accrue annual leave in proportion to the hours they actually work. The Executive Regulations convert contracted hours into equivalent leave days and round any fraction of a day in the employee's favour. Part-time staff are also entitled to pro-rated end-of-service gratuity once they complete the qualifying service. Employers should set the calculation method out in the part-time contract to avoid disagreements.
Sources and official materials
- Federal Decree-Law No. 33 of 2021 Regulating Labour Relations — Official record and amendments
- Federal Decree-Law No. 33 of 2021 and its amendments (MOHRE consolidated text) — Annual leave, holidays, sick and maternity leave
- Cabinet Resolution No. 1 of 2022 (Executive Regulations) — Carry-over, payment in lieu and part-time leave
- Annual leave (UAE government portal) — Official summary of private-sector leave entitlements
- Ministry of Human Resources and Emiratisation — Labour services and complaints
General information only, current as at 27 October 2026. It is not legal advice and does not create a lawyer–client relationship. UAE law differs between the onshore jurisdiction, the DIFC, ADGM and the free zones, and changes frequently; check current official sources and take advice on the facts of your matter.
