Annual Leave in the UAE: Entitlement, Carry Forward and Encashment Rules (2026)

Short answer: a private-sector employee in the UAE gets 30 calendar days of paid annual leave for every full year of service. Between six and twelve months of service, it's 2 days per month. Leave is paid on the full wage, and anything unused at exit gets paid out on the basic wage.

That's the easy part. The questions we get from SME owners every week are about the grey areas: can staff carry leave over, can you force someone to take it, and what happens to a balance of 47 days when the employee resigns. This guide answers those, using Article 29 of Federal Decree-Law No. 33 of 2021 and the Cabinet Resolution that sits under it.

Annual leave entitlement at a glance

Spell out in your policy how public holidays that fall inside a period of leave are treated, and handle sickness during leave with a medical certificate. Most leave disputes we see start with a policy that says nothing on these two points.

Who decides when leave is taken?

The employer sets the dates, based on business needs, but has to give the employee at least one month's notice of them. Employees can't just pick a fortnight and go. Equally, you can't keep refusing. The law says an employer can't stop an employee from using their leave for more than two years.

In practice the cleanest approach is a leave calendar agreed at the start of the year, with blackout periods (year-end close, peak season) written into the policy so nobody is surprised.

Can annual leave be carried forward?

Yes, with the employer's agreement. The employee is expected to use leave in the year it's earned, but they can carry part of it forward if company policy allows. Most well-run UAE companies cap carry-forward (half the annual entitlement is a common limit) and set a use-by date in the first quarter. Without a written rule, balances pile up and you end up with a large liability on the books.

Can staff cash in unused leave?

During employment, encashment is possible only if the employer agrees and the policy permits it. At the end of employment it isn't optional: any accrued, untaken leave must be paid out in the final settlement. The payout is calculated on the basic wage, not the gross package.

Worked example: basic salary AED 6,000. Daily rate = 6,000 ÷ 30 = AED 200. An employee leaving with 18 untaken days is owed 18 × 200 = AED 3,600 in leave salary, paid within 14 days of the last working day.

Leave salary in advance

Employees are paid their normal wage for leave days. Some contracts promise leave salary in advance, before the employee travels. Many companies just run it through the normal payroll cycle, which is fine as long as the employee isn't left short. If you pay through WPS, make sure the leave month still goes through the system on time.

The paperwork that keeps you safe

A written leave policy, a signed approval for every leave request, and a running balance per employee. That's all MOHRE or a court will ask to see. If you don't have a policy yet, our UAE HR Master Pack includes an editable leave policy, leave request form and a tracker that calculates balances for you.

Need to work out the full exit bill, not only the leave? Our free gratuity calculator handles the end-of-service part.

If you want your HR team to handle this confidently, the UAE HR Coordinator Certificate covers leave administration in full, with a ready-made leave tracker. It's self-paced, with live support included.

Quick answers

How many days of annual leave do UAE employees get?
30 calendar days per year after one year of service, and 2 days per month for service between six and twelve months.

Is unused annual leave paid out when an employee leaves the UAE company?
Yes. Accrued, untaken leave must be paid in the final settlement, calculated on the basic wage, within 14 days of the end of employment.

Can an employer refuse annual leave in the UAE?
The employer can schedule leave around business needs, with one month's notice of the dates, but cannot prevent the employee using leave for more than two years.

Can annual leave be carried forward to next year?
Yes, if the employer agrees and company policy allows it. Many companies cap carry-forward at half the annual entitlement.

This guide is general information based on Federal Decree-Law No. 33 of 2021 and Cabinet Resolution No. 1 of 2022, as amended. It is not legal advice. The DIFC and ADGM have their own employment laws.