Under UAE labour law, a private-sector employee earns 30 days of fully paid annual leave once they complete a year of service, and 2 days for each month of service once they pass six months and before they reach a year. Unused leave can be carried over with the employer's agreement, and whatever is left at the end of employment is paid out on basic salary.
That is the short answer, and it is where most leave spreadsheets stop. The trouble starts in the details: the employee who is seven months in and wants a week off, the manager who wants to carry over twenty days, the resignation where nobody agrees what is owed. This guide walks through annual leave under Federal Decree-Law No. 33 of 2021 in the order the questions actually come up, with worked examples.
Who the rules cover
Everything below applies to private-sector employees under the federal labour law. Free zones with their own employment regulations, such as DIFC and ADGM, and government employers, follow different rules. Your employment contract or company policy can always give more than the law. It cannot give less.
How much annual leave an employee earns
The entitlement depends on length of service, and it moves through three stages:
Part-time employees earn annual leave according to the hours they actually work, as set out in their employment contract.
Worked examples
Take an employee who joined on 1 March.
Notice that the jump from 22 days at eleven months to 30 days at twelve is real. A system that simply adds 2.5 days a month from the first day of work gets every one of these numbers wrong: it hands out leave during the first six months and understates it at the anniversary.
Count completed months, not calendar months started. Someone who joined on the 20th has not completed their seventh month until the 20th.
When leave is taken
The employer may set the dates of annual leave according to work requirements, in agreement with the employee, and must give at least one month's notice. In practice that means two things:
The law also protects leave from being postponed forever. An employer may not prevent an employee from using annual leave accrued for more than two years, unless the employee chooses to carry it over or to receive a cash allowance in its place, in line with the company's own regulations and the Executive Regulations.
Carry-over: what the law allows
Carry-over is the area with the most myths. What is solid:
What to put in your policy: a clear cap on how many days carry forward, a deadline for using them, and who approves exceptions. Then apply it to everyone the same way. Disputes over leave are rarely about the law; they are about one person being treated differently from another.
Encashment: being paid instead of taking leave
There are two different situations, and they work differently.
During employment. An employee may receive a cash allowance in place of leave in the situations the law and the company's regulations allow, such as leave accrued beyond the two-year point that the employee chooses to be paid for rather than take. Agree it in writing. Leave is meant to be rest, and a policy that encourages people never to take any is a poor trade.
At the end of employment. An employee who leaves is paid for any unused annual leave, regardless of how much it is, and is entitled to leave for the fraction of the final year they worked. The payment is calculated on basic salary, not on gross pay with allowances. That distinction is where many final settlements go wrong in both directions: paying leave on gross salary overpays, and forgetting the part-year underpays.
A simple discipline helps here. Keep the balance current every month, so the number on the last day is a lookup rather than an argument.
Contracts that give more than the law
Plenty of employers offer more than 30 days, or count leave in working days rather than calendar days. That is allowed, as long as the result is at least as generous as the law. The practical risk is that the contract says one thing and the spreadsheet calculates another. If a senior hire was promised 35 days, the system that tracks their balance needs to know about it for that person specifically, without changing the rule for everyone else.
Five mistakes that cost money
How Wurxa handles annual leave
Wurxa Leave works out each person's statutory annual leave from their joining date: nothing in the first six months, 2 days per completed month from six months to a year, and the full 30 days from the first anniversary. You do not maintain a formula; the balance moves on its own as people pass each stage.
Where a contract is more generous, you set that person's entitlement on their record and it replaces the statutory figure for them alone. Carried-over days are added on top, so the Balances tab shows each employee's entitlement, what they have used this year and what is left.
Employees see their balance and request leave from the phone app, including half days at the start or end of a request. Managers approve or decline from theirs. Requests over the allowance are flagged for you rather than blocked, because sometimes you approve anyway, but you decide with the number in front of you.
Because leave sits on the same record as attendance, an approved day shows on the roster and is not counted as absent, so the attendance report, the leave balance and payroll describe the same day the same way.
Wurxa is free for up to 5 employees, and every new workspace gets every feature free for 14 days, with no card. Create your workspace, add a couple of employees with their joining dates, and check the balances against your own spreadsheet.
This article explains the federal rules for private-sector employers in general terms. It is not legal advice; for a specific case, check the current law and Executive Regulations or take professional advice.
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