Leaving Your UAE Job? What Happens to Your Unused Annual Leave
Resigning or being let go in the UAE? Your final settlement should pay for leave you earned but never took. The catch: it is worked out on your basic salary only.
By Vadim Kouznetsov, published
If you resign or are terminated in the UAE, your final settlement should include payment for annual leave you earned but never took. The catch, according to Gulf News, is that the payout is worked out on your basic salary, not your total salary.
Here is what the UAE Labour Law says about unused leave for private sector employees.
How much annual leave you earn under UAE Labour Law
Article 29 of Federal Decree-Law No. 33 of 2021 sets out annual leave for private sector employees:
- 30 days of paid annual leave for each completed year of service.
- 2 days per month if you have completed more than 6 months but less than a year of service.
- Proportionate leave for the final part of a year worked, if your employment ends before you use your entitlement.
That last point is easy to forget: leave keeps building up during your final months. For a wider breakdown of entitlements, see our UAE Leave Guide 2025: Complete Guide to Employee Holiday Entitlements.
Is unused annual leave paid when you resign or are terminated?
Yes. Employees are entitled to payment for legally accrued annual leave they have not taken when their employment ends, Gulf News reported. It makes no difference whether you resigned or your employer ended the contract.
The payment also covers leave earned during your final, incomplete year. It is calculated in proportion to the period you worked.
Why the leave payout uses your basic salary
Article 19(2) of Cabinet Resolution No. 1 of 2022 states that payment for unused leave is calculated according to the employee's basic salary.
In practice, allowances in your package are not part of the calculation. If a large share of your monthly pay comes from allowances, your leave payout will be smaller than a daily rate based on your total salary would suggest.
Before you sign your final settlement, check:
- The basic salary figure in your contract and latest payslips.
- The number of leave days your employer has recorded as taken.
- Whether leave from your final months has been added proportionately.
- How the leave payment was calculated. Ask HR in writing if it is not shown.
If something does not add up, raise it in writing before you sign. Other deductions from end-of-service pay are covered in UAE Gratuity: When Can Your Employer or Bank Deduct Your End-of-Service Pay?
Can you carry forward leave or swap it for cash?
You do not have to wait until you leave to deal with unused days. Under Article 19(1) of Cabinet Resolution No. 1 of 2022, employees may:
- Carry forward up to half of their annual leave entitlement to the following year.
- Agree with their employer to receive cash instead, calculated on the wage that applies when the leave becomes due.
Both options are subject to the relevant legal provisions and to agreement with your employer, so neither happens automatically.
Your employer also cannot stop you from taking accrued annual leave for more than 2 consecutive years. The exception is when you choose to carry the leave forward or take cash compensation in line with the regulations. If your requests keep getting turned down, read Can UAE Employers Deny Annual Leave? Employment Law Guide 2025.
Key takeaway
Unused annual leave does not disappear when you leave a UAE private sector job. You are entitled to be paid for it, including leave from your final months, but the amount is based on your basic salary, so check the figures before signing anything.
FAQ
Do I get paid for unused annual leave if I resign in the UAE?
Yes. Private sector employees are entitled to payment for legally accrued leave they have not taken, whether they resign or are terminated.
Is unused leave paid on basic or total salary?
On basic salary. Article 19(2) of Cabinet Resolution No. 1 of 2022 says the payment is calculated according to the employee's basic salary.
How much leave do I get if I worked less than a year?
If you have completed more than 6 months but less than a year, you earn 2 days per month. Leave for a final, incomplete year is paid proportionately when your job ends.
Can I carry forward annual leave in the UAE?
Yes, up to half of your annual entitlement, subject to the legal provisions and agreement with your employer.
Can my employer stop me taking annual leave?
Not for more than 2 consecutive years. The exception is when you choose to carry the leave forward or take cash compensation under the regulations.
Further reading
The UAE week, every Monday
The week's stories on jobs, visas, money and daily life in one short email. Unsubscribe in one click.
