Annual Leave Entitlement in the UAE: Labour Law Guide

Annual leave in the United Arab Emirates is one of the more generous statutory entitlements in the region: thirty calendar days of paid leave after a year of service, with the law applying squarely to the private sector. The rules sit in Federal Decree-Law No. 33 of 2021, the UAE Labour Law that took effect on 2 February 2022 and replaced the older 1980 framework.

This guide explains what UAE employers must provide under articles 29 to 31 of the Labour Law, how leave accrues for short-tenure staff, what “basic wage” means in practice, and the compliance pitfalls that cause disputes when an employee resigns or is dismissed.

Key takeaways

• Federal Decree-Law No. 33 of 2021 entitles private-sector employees to 30 calendar days of paid annual leave per year after one year of continuous service.
• Employees with less than one year of service earn 2 days of leave per month worked, pro-rated from their start date.
• Annual leave is paid at the employee’s basic wage — not total remuneration, allowances, or bonuses.
• Unused annual leave must be paid out on termination of employment.
• Public holidays are separate from annual leave and do not reduce the 30-day entitlement.

The statutory entitlement under the UAE Labour Law

Articles 29 to 31 of Federal Decree-Law No. 33 of 2021 set the annual leave framework for the UAE private sector. After one year of continuous service, an employee is entitled to 30 calendar days of paid annual leave per year. The entitlement is expressed in calendar days rather than working days, which is an important distinction when scheduling leave around weekends and rest days.

For employees with less than one year of service, the law provides 2 days of leave per month worked. This pro-rated formula means a new joiner who has completed six months of service has accrued 12 days of leave, regardless of whether their full-year entitlement would have rounded to a different figure.

Compared with regional peers, the UAE entitlement is materially more generous than several Asian jurisdictions. For context on how other regimes handle the same question, see our guides to annual leave entitlement in Singapore and annual leave entitlement in India.

Who is eligible

The Labour Law applies to all employees in the private sector. Full entitlement to 30 calendar days kicks in after one year of continuous service; before that, the 2-days-per-month accrual applies.

The law does not condition the entitlement on job grade, salary band, or contract type. A junior administrator and a senior manager working in the same private-sector business have the same statutory floor — though many employers offer enhanced leave at executive levels by contract.

How annual leave accrues

The accrual structure is straightforward but worth spelling out:

• Months 1 through 12: 2 days per completed month of service.
• After 12 months of continuous service: full entitlement of 30 calendar days per year.

A worked example helps. An employee who joins on 1 March and resigns nine months later, on 30 November, has accrued 18 days of leave under the 2-days-per-month rule. If the same employee had stayed past their first anniversary, they would step up to the full 30-day-per-year entitlement going forward.

Pay during annual leave

Annual leave pay in the UAE is calculated on the basic wage. The Labour Law treats basic wage as the contractual baseline figure, excluding allowances, bonuses, and other supplements added on top.

This is one of the most consequential details in UAE payroll. An employee whose total monthly compensation is built from a basic salary plus housing, transport, and other allowances will receive a leave payment based only on the basic component — not the total package. Employers structuring contracts with a small basic wage and large allowances should be conscious that this design choice flows directly through to leave pay and end-of-service entitlements.

Leave scheduling and splitting

Under the Labour Law, the employer determines when employees take their annual leave, but must take the employee’s preferences into account. Leave can be split into two periods by agreement between employer and employee.

In practice, this gives the employer the right to manage operational coverage — for example, requiring leave during a quieter season — while requiring genuine consultation with the employee. A blanket refusal to consider preferences would not satisfy the article’s standard of considering operational requirements alongside the employee’s wishes.

Employer obligations

A compliant UAE annual leave policy needs to deliver on six core obligations under the Labour Law:

1. Grant 30 calendar days of paid annual leave per year of service after the first anniversary.
2. Pay the basic wage during annual leave — not total remuneration.
3. Pro-rate leave at 2 days per month for employees with less than one year of service.
4. Pay for unused annual leave on termination of employment, regardless of who initiates the separation.
5. Not require the employee to work during annual leave — the entitlement is genuine paid time off, not a notional credit on the payslip.
6. Maintain records of annual leave taken by each employee.

The fifth point matters more than it sounds. Calling an employee back for “just a few hours” of work during their booked leave or routinely answering urgent emails does not square with the statutory protection. The cleanest practice is to treat annual leave as fully off-duty time and arrange operational coverage accordingly.

Employee rights

The corresponding rights for private-sector employees in the UAE are:

• The right to 30 calendar days of annual leave after one year of service.
• The right to be paid at the basic wage during annual leave.
• The right to a paid leave payout on termination for any accrued, unused balance.
• The right to choose the timing of annual leave, subject to operational requirements.

The last point is a balancing test. The employee proposes when they want to take leave; the employer accepts unless there is a genuine operational reason to defer. A standing “no leave during peak periods” policy is generally workable; arbitrary rejection of every request is not.

Carry-over and public holidays

Two practical questions come up almost every year. The Labour Law treats them as follows.

Carry-over of unused leave

Unused annual leave can be carried forward to the next year by mutual agreement between employer and employee. There is no automatic carry-over, but neither is there a hard prohibition: the parties can agree.

In practice, most employers set a written policy capping how many days roll over, with the balance either taken before year-end or paid out. A complete forfeiture clause would sit uneasily with the statutory entitlement, particularly when read alongside the termination payout obligation.

Public holidays

UAE public holidays are separate from annual leave and do not count against the 30-day entitlement. If a public holiday falls during a booked annual leave period, the employee is not deemed to have used an annual leave day for that public holiday — that day is paid as a holiday in its own right.

For broader context on how public holidays sit alongside paid time off in different regimes, see our overview of the main types of leave employers manage.

Common pitfalls

Three errors recur in UAE leave administration, particularly among employers running multi-country policies through a single HR system:

1. Not pro-rating leave for new employees

The Labour Law explicitly provides 2 days per month for employees with less than one year of service. Skipping this accrual — or only granting leave from the first anniversary — under-pays new joiners and creates an immediate gap on early-resignation termination payouts.

2. Not paying for unused leave on termination

Statutory annual leave that is accrued and untaken at the date of separation must be paid out. This applies regardless of whether the employee resigns, is dismissed, or reaches the end of a fixed-term contract. Treating unused leave as forfeited at termination is a frequent dispute trigger.

3. Confusing basic wage with total compensation

Annual leave pay is based on the basic wage, not total remuneration. A leave payment calculated on the full package — including housing, transport, and other allowances — over-pays relative to the statute, while a payment that wrongly excludes contractual basic-wage components under-pays. Either error becomes visible at audit or at termination.

Frequently asked questions

How many days of annual leave do UAE employees get?

Private-sector employees in the UAE are entitled to 30 calendar days of paid annual leave per year after one year of continuous service. Employees with less than one year of service accrue 2 days of leave per month worked.

Do employees in their first year in the UAE get any annual leave?

Yes. Federal Decree-Law No. 33 of 2021 provides 2 days of leave per month worked for employees with less than one year of service. A new joiner who has worked six months has accrued 12 days of leave.

Can annual leave be carried forward in the UAE?

Unused annual leave can be carried forward to the next year by mutual agreement between the employer and employee. There is no automatic carry-over; the practice should be set out in the employment contract or policy.

Are UAE public holidays counted as annual leave?

No. Public holidays in the UAE are separate from annual leave and do not count against the 30-day entitlement. A public holiday falling within a booked leave period does not consume an annual leave day.

What rate of pay applies during annual leave in the UAE?

Annual leave is paid at the employee’s basic wage — the contractual baseline figure, excluding allowances, bonuses, and other supplements. Employers structuring contracts with a small basic and large allowances should note that this flows directly through to leave pay.

What happens to unused annual leave when an employee leaves?

Accrued, unused annual leave must be paid out on termination of employment. This applies whether the employee resigns, is dismissed, or reaches the end of a fixed-term contract.

Putting it into practice

If you employ staff in the UAE, the practical configuration list is short:

1. Confirm contracts state annual leave entitlement clearly — at or above the 30-calendar-day floor.
2. Configure your HR or payroll system to accrue at 2 days per month for the first year, then 30 days per year thereafter.
3. Verify your leave pay calculation uses the basic wage, not total remuneration.
4. Set a written carry-over policy with a clear cap and treatment of any excess.
5. Make sure your termination process pays out accrued unused leave automatically.
6. Keep accurate leave records aligned with the statutory record-keeping obligation.

A modern leave management system handles the 2-days-per-month first-year accrual, the 30-day annual cap, and the basic-wage pay calculation automatically — so when an employee resigns nine months in, the final settlement is correct without anyone having to dig through articles 29 to 31 by hand.

Sources

• UAE Ministry of Human Resources and Emiratisation (MOHRE) — Annual leave (primary source)
• Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (articles 29 to 31)

Last updated: 4 May 2026. This article is general guidance, not legal advice. For complex cases — including disputes over termination payouts, basic-wage calculation, or the treatment of allowances — consult a UAE-qualified employment lawyer.