Enter your basic salary and unused leave days on the left — your estimated payout appears here instantly.
✓ Daily wage calculation
✓ Unused leave days
✓ Contract type context
✓ Full formula breakdown
Based on standard UAE leave encashment practice. Unused annual leave is typically paid using basic salary only. This is an estimate — verify against your employment contract and HR records.
How to Use the Leave Encashment Calculator
Three simple steps — no sign-up, no data sent anywhere, no unnecessary fields. Your result appears as soon as you enter your details.
Enter Your Basic Salary
Type in the monthly basic salary shown on your employment contract. Use your basic pay only — do not add housing allowance, transport allowance, or any other benefits. Under UAE Labour Law, these extras are excluded from the leave encashment formula. If you are unsure which figure to use, check your contract or ask your HR team.
Add Your Unused Leave Days
Enter the number of annual leave days you have accrued but not yet taken. Fractional values are fully supported — for instance, 22.5 days is a valid entry. To find your exact balance, check your payslip, your company's HR portal, or ask your HR department directly before you proceed.
Review Your Instant Breakdown
The result panel updates in real time. It shows your calculated daily wage, the number of unused leave days entered, the full formula applied, and your estimated leave encashment amount in AED. You can also add your contract type and years of service for extra context. No button press is needed — the result appears as you type.
The Complete Guide to Leave Encashment in UAE (2026)
Everything employees, HR teams, and payroll professionals need to know about unused annual leave payout under UAE Labour Law — explained clearly and in full.
What is leave encashment in UAE?
Leave encashment is the cash payment an employee receives for annual leave days that have built up but were never taken. This situation is common at the end of employment — whether through resignation, termination, or contract expiry. In the UAE, the right to receive this payment is protected under Federal Decree-Law No. 33 of 2021, which governs private sector employment across the country.
Importantly, the calculation is based on the employee's basic monthly salary alone — not the total salary package. Housing allowance, transport allowance, and other benefits are excluded. Many employees are unaware of this distinction, which often leads to incorrect expectations about the size of their final payout.
How much annual leave do UAE employees accrue?
Under UAE Labour Law, full-time employees in the private sector are entitled to a minimum of 30 calendar days of annual leave per year once they have completed one year of continuous service. In their first year, employees accrue leave at a rate of two days per month. Some employers offer more than the statutory minimum — always check your individual contract for the exact figure.
Leave that is not taken does not automatically disappear. Instead, it accumulates in your leave balance. When employment ends, your employer is required to pay out any unused balance. This payout is what this calculator estimates.
How is leave encashment calculated?
The standard UAE formula is: Leave Encashment = (Basic Monthly Salary ÷ 30) × Unused Leave Days. First, the daily wage is found by dividing the basic salary by 30. That fixed divisor of 30 applies regardless of how many days are in the actual month. Then the daily wage is multiplied by the total number of unused leave days to give the final payout amount.
For example, consider an employee with a basic salary of AED 10,000 and 22 unused leave days. Their daily wage is AED 333.33 (10,000 ÷ 30). As a result, the estimated leave encashment comes to AED 7,333.33 (333.33 × 22). The calculation is straightforward once the correct salary figure is used.
UAE Labour Law uses 30 as a fixed daily divisor for all wage-based calculations — including leave encashment, gratuity, and notice period pay. This applies regardless of whether the month has 28, 29, 30, or 31 days. Using a fixed number creates a consistent and predictable daily rate across the entire calendar year, which simplifies HR and payroll calculations for all parties.
Why basic salary is the only figure that counts
One of the most frequent mistakes employees make is calculating leave encashment using their full monthly pay — including all allowances. In practice, the encashment formula relies solely on the basic salary. Housing allowance, transport allowance, food allowance, and any other variable or fixed supplements are not included in the calculation basis.
As a result, employees who earn a high proportion of their income through allowances often receive a lower leave payout than they expect. For instance, an employee earning AED 5,000 basic salary plus AED 5,000 in allowances (a total package of AED 10,000) will have their encashment calculated on AED 5,000 — not AED 10,000. Always confirm your basic salary figure before using this calculator.
Does resignation affect your leave encashment entitlement?
Generally, unused annual leave is payable on resignation, termination, or contract completion. The payment obligation under UAE Labour Law applies in all three scenarios. That said, your entitlement can be affected by the specifics of your contract. Some employment agreements include clauses about minimum notice periods, leave forfeiture under certain conditions, or service thresholds that must be met before leave pay becomes payable.
Additionally, if an employee has taken leave in advance — that is, more days than they have officially accrued — the employer may deduct the overpayment from the final settlement. In short, while the law provides a baseline, the details of your own contract and leave records will determine the exact amount you receive.
Leave encashment vs gratuity — what is the difference?
Leave encashment and end-of-service gratuity are two separate calculations, and many employees confuse them. Specifically, leave encashment covers only the unused annual leave balance, using the daily wage formula described above. Gratuity, on the other hand, is a service-based payment calculated differently — it depends on years of service, contract type (limited or unlimited), and the reason for leaving.
Both are typically paid together as part of a final settlement package. However, they are calculated independently. This calculator handles leave encashment only. If you need to estimate your gratuity as well, use a dedicated UAE gratuity calculator alongside this one.
In some cases, yes. Certain employers allow employees to encash a portion of their accrued leave during an active contract — for example, if the employee cannot take time off due to operational demands. However, this is at the employer's discretion and must be agreed in writing. UAE Labour Law does not mandate mid-employment leave encashment — it only guarantees payout at the end of the employment relationship.
What records should you keep?
Before you leave a job, it is worth gathering a few key documents. First, obtain a written leave balance statement from your HR department — this confirms exactly how many days you are owed. Second, keep a copy of your most recent payslip showing your basic salary clearly. Third, review your employment contract for any leave-related clauses. Having these documents in hand makes it far easier to verify that your final settlement is accurate and dispute any discrepancies early.
What to do if your employer disputes or withholds the payment
If your employer refuses to pay your leave encashment or offers an amount you believe is incorrect, you have formal channels available. The Ministry of Human Resources and Emiratisation (MOHRE) handles private sector labour disputes in the UAE. You can file a complaint through the MOHRE website, their app, or by visiting a labour relations office. Complaints are usually processed within 14 days. In many cases, the dispute is resolved at this stage before escalating to the courts.
Keeping records of your leave balance, salary, and contract makes any dispute much easier to resolve. Employers are legally required to settle all end-of-service entitlements within 14 days of the employment contract ending.
This calculator provides a general estimate only. Actual payout amounts can vary depending on your specific contract, your employer's leave policy, your accrued leave records, and how UAE Labour Law is applied in your situation. Always verify your figures with your HR department and seek advice from a qualified legal professional if you are unsure of your entitlements.
Frequently Asked Questions
Clear answers to the most common questions about unused annual leave payout in the UAE.