UAE Leave Encashment Calculator 2026 | Payout & Benefits
Free UAE leave encashment calculator. Calculate annual leave payout when resigning, transferring jobs. Unused leave compensation per UAE Labour Law. Includes basic salary, per diem, housing allowance breakdown.
Updated for 2026
Salary Details
Leave Details
✓ Last updated: March 2026 | Built with CRA-official rates, Bank of Canada data, and OSFI guidelines
How to Use This Calculator
Input your monthly basic salary in AED.
Input the number of unused annual leave days.
Enable if your contract includes allowances in encashment.
See your leave encashment amount and total payout.
Understanding Your Results
- Leave EncashmentCash compensation for unused annual leave when resigning or transferring jobs.
- Daily WageBasic monthly salary divided by 30 days – this is the basis for encashment.
- Annual Leave Entitlement30 days per year under UAE Labour Law.
- Pro-Rata LeaveLeave calculated proportionally for partial years of service.
Key Tips
- ✓Leave encashment is calculated on basic salary only – allowances are excluded under UAE Labour Law.
- ✓Daily wage = basic salary ÷ 30 days.
- ✓Unused leave is paid when you resign or transfer jobs.
- ✓Some employers allow carryover of unused leave (max 5 days).
- ✓Leave encashment is part of your final settlement – ensure it's included.
Related Calculators
UAE Leave Encashment and Annual Leave 2026
What is Leave Encashment?
Leave encashment is cash compensation for unused annual leave when you resign or transfer jobs. UAE Labour Law entitles employees to 30 days annual leave. If you have unused leave days, you receive cash for those days.
How is Daily Wage Calculated?
Daily wage = monthly basic salary ÷ 30 days. Only basic salary counts, NOT allowances. This is a critical distinction – many expats think full salary counts, but only basic salary.
UAE Annual Leave Entitlement
UAE Labour Law entitles all employees to 30 days annual leave regardless of nationality. Some companies offer more by policy but the law minimum is 30 days.
Leave Encashment on Resignation
When you resign, you're paid for all unused leave. Your final settlement includes salary, leave encashment, and gratuity (if eligible). All must be paid before exit.
Example: 10 Days Unused Leave, 10,000 AED Basic Salary
10,000 AED basic salary, 10 unused leave days.
- Basic Salary
- 10,000 AED
- Unused Leave
- 10 Days
- Allowances
- Not Included
- Daily Wage
- 333.33 AED
- Leave Encashment
- 3,333.33 AED
- Total Payout
- 3,333.33 AED
Frequently Asked Questions
Clear answers to common questions to help you use this calculator confidently.
What is leave encashment in UAE?
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What is leave encashment in UAE?
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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).
How is leave encashment calculated in UAE?
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How is leave encashment calculated in UAE?
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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.
Do allowances count in leave encashment calculation?
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Do allowances count in leave encashment calculation?
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NO. Only basic salary counts for leave encashment. Housing, transport, meal allowances are excluded. Check your salary certificate for basic amount breakdown.
What is the maximum leave encashment I can receive?
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What is the maximum leave encashment I can receive?
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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.
What if I move to a new company? Do I keep unused leave?
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What if I move to a new company? Do I keep unused leave?
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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.
Can my employer refuse to pay leave encashment?
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Can my employer refuse to pay leave encashment?
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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.
How does leave encashment affect my gratuity and end-of-service benefits?
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How does leave encashment affect my gratuity and end-of-service benefits?
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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.
What if I worked only part of a year? How is pro-rata leave calculated?
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What if I worked only part of a year? How is pro-rata leave calculated?
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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.
Is leave encashment subject to income tax or withholding in UAE?
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Is leave encashment subject to income tax or withholding in UAE?
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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.
Do I need MOHRE (Ministry of Human Resources) approval to receive leave encashment?
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Do I need MOHRE (Ministry of Human Resources) approval to receive leave encashment?
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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.
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