UAE Leave Encashment Calculator 2026 | Payout & Benefits

Leave encashment is cash compensation for unused annual leave when you resign or transfer jobs. UAE law requires employers to pay for all accrued but unused leave. Calculation = unused days × daily wage (basic salary ÷ 30).

Daily wage = basic monthly salary ÷ 30. Leave encashment = unused days × daily wage. IMPORTANT: Only basic salary counts, NOT allowances (housing, transport, etc.). Example: AED 10,000 basic, 10 unused days = AED 333.33/day × 10 = AED 3,333.

NO. Only basic salary counts for leave encashment. Housing, transport, meal allowances are excluded. Check your salary certificate for basic amount breakdown.

Depends on unused leave days. UAE annual leave entitlement = 30 days per year. If you carried over from prior years, total can be higher (but most companies don't allow carryover). Max standard = 30 days/year.

NO. When transferring to a new company, you receive leave encashment for unused leave from old company. Old company pays; new company gives you fresh 30 days leave. You don't carry leave between employers.

NO. Leave encashment is mandatory under UAE Labour Law. If employer refuses, escalate to Ministry of Human Resources or labour dispute committee. You have legal right to this payment.

Leave encashment and gratuity (EOSB) are SEPARATE payments. Gratuity covers your service period; leave encashment covers unused leave. Both are paid when you resign. Use a separate Gratuity Calculator to estimate EOSB. Total final settlement = leave encashment + gratuity + any outstanding salary.

Pro-rata = (months worked ÷ 12) × 30 days = entitled annual leave. Example: 6 months worked = 15 days entitled. If you took 10 days, you have 5 unused days. Leave encashment = 5 days × daily wage. Use this calculator to model pro-rata scenarios.

UAE has no income tax, so leave encashment is tax-free for UAE residents. However, check your employment contract for any deductions (company policies, loans, etc.). For expats, some home countries may tax UAE income—consult a tax professional.

MOHRE oversight applies to dispute settlement. Normally, your employer calculates and pays leave encashment on resignation. If there's a dispute, file a complaint with MOHRE or labour court. Keep salary records and employment contract as proof for negotiations.