Leave Salary calculation in UAE

Leave Salary calculation in UAE:

The leave salary, also known as annual leave, is a fundamental right for any Employee that works in a company, and it is determined in the UAE Labour Law. Under the UAE labour law, an Employee is eligible for annual leave depending on his/her length of employment. This also depends on the nature of the contract (limited or unlimited) between the Employer and the Employee.

When the Employee requests the leave salary, he or she should receive the following:

✔            Basic wages.

✔            Housing Allowances.

According to Article 75 of the UAE Labour Law, the Employers should calculate the leave salary based on the period that the Employee has been working for the company:

✔            If the Employee has been working for more than six months but less than a year, they should receive two days leave for every month.

✔            If the Employee worked for more than a year in the company, they should receive 30 days annually.

Each worker shall be entitled to his basic wage and the housing allowance, if applicable, in respect of his days of annual leave. If the leave days on which he worked were not carried forward to the following year, the employer shall pay him his normal wage plus an allowance in lieu of leave, for the actually worked days, calculated on the basis of his basic wage. The leave salary is highly valuable for all the workers and the staff.

For Employees, the leave pay is of great significance. They can use this fund to spend it on their vacations, make an investment, or any other way they would like. To achieve optimum results, Employers must strategize the entire salary process and calculate the payments accurately. Nevertheless, many businesses face problems with it because, in the UAE, the laws regulating annual leave are explicit on how it should be handled. In case any organization does not do it properly, there might be consequences.