Know more about leave salary calculation in the UAE
Find out How leave salary calculation in UAE is done in 2023
Commonly, the leave salary Calculation in UAE is a topic that generates confusion among workers and companies alike. However, this is a crucial subject since both parties should learn to understand their rights. What is leave salary? How can a company calculate this? Which benefits workers should expect from their companies?
In this article, we will tell you everything about leave salaries. It is crucial to understand what labour law says about different leaves and special clauses in national law. Therefore, we will simplify this process for you in case you need information about how to calculate leave salaries.
- What are the different types of leaves?
- How Leave salary calculation in UAE is done by companies?
- Is there a leave salary calculation in UAE formula?
- How do companies calculate salary leaves in case of resignation?
- How can we help you learn more about leave salary calculation?
1. What are the different types of leaves?
The UAE authorities created labour laws that grant rights to workers in the private sector. One of the main points of this legislation is that employees are entitled to annual leave for Leave salary calculation in UAE. Furthermore, workers that become sick during their labour days are can enjoy special benefits while they recover from their disease.
Let us take a look at the different kinds of leaves that exist under current labour law in the UAE:
1.1 Annual leaves
Under current labour law, workers are entitled to annual leaves if they completed at least six months of work. Free days and financial benefits are the main points that this legislation offers to employees around the Emirates. Even part-time workers can enjoy these kinds of leaves as shown in the Executive Regulations of the Labour Law.
Companies and workers should know the conditions created by the UAE government about annual leaves:
-Employees will receive 30 days of a fully paid leave salary if they worked for at least one year. Workers can receive two days of leave salary per month if they have completed at least six months of service. Above all, Annual leaves salary calculation in UAE are established considering all possibilities that may arise between the parties involved.
-Companies must inform their employees when their annual leaves start at least one month in advance. Therefore, both parties can agree on the dates that are more convenient to enjoy these legal services benefits.
-Employers might need their employers during the whole year. Nonetheless, companies cannot prevent their employees from enjoying their annual leaves for more than two years. If employees work during their leave period, they must receive their corresponding salary benefits.
-Contractual clauses that are present on the contract between workers and companies may count on leave salary calculations. However, we must note that official holidays and leaves caused by sickness are included on leave salary calculation in UAE.
1.2 Sick leaves
Employees can get sick leaves to recover from their diseases or injuries. Companies have to grant free days to allow their workers to recover, granting free days and some salary benefits. Also, it is important that workers know their rights regarding the COVID-19 global pandemic.
Still, there are clauses that workers and companies need to know about this kind of leave:
-Every employee is entitled to recover from sickness using sick leaves. However, they cannot be absent from work for more than 90 days during a year. Moreover, a worker is eligible for sick leave in UAE if they worked for at least 3 months in the company.
-UAE labour law allows employers to ask their employees for evidence regarding their illnesses. To present evidence of their diseases, companies can put their employees under medical observation to get a diagnosis.
-Sick pay leaves are paid following this set of clauses established by labour law:
-At first, workers are entitled to full pay on the first 15 days of their sick leave.
-Then, employees will receive half of their salary in the next 30 days.
-Finally, workers will not receive a salary on the final 45 days of their sick leave.
-Illnesses caused by misconduct on the part of the worker do not count for sick leaves. Health problems caused by alcohol or narcotics are excluded from sick leaves according to labour law. Besides, workers cannot perceive their salary if they work for another company during their sick leave.
1.3 Maternity leave
If a woman worked for at least one year in a company, she has the right to her maternity leave. If she has not completed a year in the company, she will receive half the payment during her maternity leave.
Before and after childbirth, female workers will receive 45 days of maternity leave fully paid. After this maternity leave is over, a woman worker can ask for an extension of their leave permit. Moreover, this extension of the permit can be up to 100 continuous or intermittent days. During this time, female workers will not receive their salaries.
During the baby’s first 18 months, female workers can have two half-hour breaks during the day. The UAE authorities grant this permission to allow female workers to take care of their children.
1.4 Holiday leaves
Article 21 of the UAE labour law says that workers can enjoy their free time during public holidays. Furthermore, a company must define at least one day off for its employees every week. Employers have to grant full payment to their workers during public holidays and weekly rests.
The holidays established by law shall be paid in full to the workers. These dates count towards the Annual Leave Salary calculation in UAE from work as well as sick leave. Some of the special dates established by labour law are:
-Hijri New Year’s
-Gregorian New Year’s
-Eid Al Fitr (end of Ramadan)
-Eid Al Ada and Waqfa
-Prophet Mohammed’s Birthday
-Isra and Al Mi’raj
-National Day
In addition, companies that require that their employees work during any public holiday or leave must compensate their employees. Workers will receive an additional fifty per cent of their regular daily salary when working during these leaves.
1.5 Other kinds of leaves
-The UAE labour law grants 5 days of parental leave to male employees after the birth of their child.
-After the death of a spouse, workers will receive 5 days of paid leave. In the case of the death of a child, parent or sibling, employees will receive 3 days of paid leave. This is called compassionate leave.
-Employees that are studying in one of UAE’s certified educational institutions can have 10 free days. Moreover, these days will be fully paid only if workers have more than 2 years in the same company.
-Last but not least, nationals are entitled to an extended break to comply with national military service.
2. How leave salary calculation in UAE is done?
To calculate the wage benefits of workers during their annual leaves, we must consider some articles on labour law. According to current UAE labour law, employers must consider these articles to comply with authorities:
-In article 75, the labour law states that workers have the right to an annual vacation. After completing one year in the company, the leave salary in the UAE is calculated based on the last salary drawn by the employee. Consequently, workers will receive the equivalent of 30 days’ wages during their annual leaves.
-In case workers have less than 1 year in the company, they can apply for leaves under certain conditions. Employees will receive 2 days of salary for each month worked. This stipulation only applies to those workers who have more than 6 months working in that company.
-Employees will receive their basic pay in addition to the housing allowance during annual leaves.
3. Is there a leave calculation formula?
First and foremost, we should note that leave salary calculation in UAE is paid to employees before their vacation. However, companies and workers are probably asking how to properly calculate the exact amount of money for annual leaves. So there are some things that both parties have to consider to comply with legal requirements:
-Workers have the right to receive 30 days of their regular earnings during their annual leaves. This amount depends on the worker’s current salary during the year that corresponds to this legal rest.
-This calculation may include other labour benefits previously stipulated in the contract between companies and workers. Still, both parties need to define the date of the annual leave and financial benefits.
Nonetheless, you might need help on how to properly calculate leave salary calculation in UAE as a company or employee. At Connect Legal we have lawyers that are ready to assist your company with Legal Services, so you can comply with labour law. As an employee, our team can help you to obtain your legal services benefits from your company without problems.
4. How Leave salary Calculation in UAE is done in case of resignation?
At first, companies should consider the type of contract they have with their employees. Depending on the contract, workers will receive financial benefits that are subject to their years of work in the company. This type of benefit is known as gratuity pay.
4.1 Workers on a limited contract
For those workers who have a limited contract, gratuity pay is established according to the time worked as follows:
-Employees who have less than a year working in a company do not receive gratuity pay.
-Workers who have between 1 and 5 years working for a company will receive gratuity pay. The amount of this payment is the equivalent of 21 days of salary for each year worked.
-For workers with more than 5 years of experience, they will receive 30 days of pay for each year worked.
4.2 Workers on an unlimited contract
In the case of workers with unlimited contracts, gratuity pay varies depending on the situation. Whether the contract is terminated by the company or by the worker, it changes the benefits received by the employee.
When the company is responsible for the termination of the contract, the salary benefits are established as follows:
-Employees who have less than a year working in a company will not receive gratuity pay.
-Workers who have between 1 and 5 years working for a company will receive gratuity pay. The amount of this payment is the equivalent of 21 days of basic salary.
-For workers with more than 5 years of experience, they will receive 30 calendar days of basic salary
In the case of employee resignation, gratuity payments are established as follows:
-Employees who have less than a year working in a company will not receive gratuity pay.
-Workers who have between 1 and 3 years working for a company will receive gratuity pay. The amount of this payment is 1/3 of the equivalent of 21 days of basic salary.
-Workers who have between 3 and 5 years working for a company will receive gratuity pay. The amount of this payment is 2/3 of the equivalent of 21 days of basic salary.
-For workers with more than 5 years of experience, they will receive full 21 days’ basic salary.
5. How can we help you learn more about leave salary calculation in UAE?
Annual Leave Salary Calculation in UAE can seem like a complicated task for someone with no experience. A miscalculation of this salary benefit can lead to disputes between companies and employees, ending with legal battles. For this, we offer our clients a wide variety of legal services.
As we have shown you, the calculation of this amount depends on many variants that allow you to define the time of the vacation and the financial benefits. To calculate properly, you must know the current labour law and the parameters established by the UAE government.
Do you want more information on Annual Leave salary calculation in UAE? If you need help or want to know more about financial benefits for employees, email us at [email protected] and you will talk to one of our representatives who will answer your questions. Visit our webpage for more info.
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