Understanding UAE Annual Leave Pay: Full Salary Entitlement

Jul 26, 2026

64 min

Jul 26, 2026 03:30

UAE annual leave pay: Are you entitled to your full salary, including allowances?

## Full Salary During Annual Leave

In the UAE, employees are entitled to receive their full salary during annual leave, which includes the basic wage and all regular allowances. This is mandated by Article 29 of Federal Decree-Law No. 33 of 2021. Many employees mistakenly believe that only the basic salary or basic salary plus housing allowance is due during this period, but this practice is not compliant with the law.

## Misconceptions and Legal Requirements

Salam Pappinissery, CEO of YAB Legal Services, clarifies that the term 'wage' under UAE Labour Law encompasses the basic wage along with allowances such as housing, transport, and other regular benefits. Employers must pay the full salary, including these allowances, during the 30 calendar days of statutory annual leave.

## Distinction Between Leave and Termination

It is important to differentiate between taking leave during employment and encashing unused leave upon termination. While on leave, employees should receive their full salary, but encashment for unused leave at termination is calculated based on the basic salary unless the contract specifies otherwise.

## Addressing Non-Compliance

If an employer fails to include regular allowances in the leave pay, employees can address the issue with their HR department or file a formal complaint with the Ministry of Human Resources and Emiratisation (MoHRE).

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