Leave Encashment Calculator 2026
Leave Encashment Calculator
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Understanding Leave Encashment Under UAE Labour Law
Leave encashment is the cash payment an employee receives for unused annual leave when employment ends — by resignation, termination, or contract expiry. Under Article 29 of Federal Decree-Law No. 33 of 2021, this payment is calculated on the employee’s basic salary only, not the full monthly wage.
This is a common point of confusion. During active employment, annual leave is paid at the full wage (basic salary plus any fixed allowances stated in the contract). At termination, the unused balance is cashed out at basic salary only. Getting this distinction wrong is one of the most frequent sources of final settlement disputes referred to MOHRE.
Entitlement builds up in stages. No leave accrues during the first six months of service. After completing six months, leave accrues at 2 calendar days per month going forward, not retroactively. After one full year of continuous service, the entitlement becomes 30 calendar days per year. Use the calculator above to work out exactly what is owed, whether the unused balance is already known or needs to be calculated from a start date and last working day.
Calculate Leave Encashment in 3 Steps
1
Choose your mode
Use I know my unused days if the balance is already confirmed on a payslip or HR letter. Use Calculate my accrued days to work it out from service dates.
2
Enter salary and leave details
Type in the monthly basic salary (or use the gross salary helper), then add the unused leave days or the service dates.
3
Get the breakdown
See the daily rate, days encashed, and total payment, with the exact formula shown, ready to check against a final settlement.
See the Maths Behind Each Mode
Basic salary → Encashment
Basic monthly salary
AED 9,000
Unused leave days
20
Daily rate
AED 300
Encashment
AED 6,000
9,000 ÷ 30 × 20
Service dates → Balance → Encashment
Service period
1y 4m
Accrued entitlement
40 days
Leave already taken
15 days
Unused balance
25 days
(Basic ÷ 30) × 25
Entitlement
How leave accrues
- 30 calendar days/year after 1 year of service
- 2 days/month for 6–12 months of service
- Under 6 months — no statutory entitlement
Basis
How it's paid
- Encashment on exit = BASIC salary
- Daily rate = basic ÷ 30
- Pay = daily rate × unused days
Entitlement
Carry-forward cap
- Requires employer agreement or company policy
- Capped at max 50% (Cabinet Resolution No. 1/2022, Art. 19)
- Unused balance is encashed on exit
Frequently Asked Questions
The questions Our payroll team gets asked most often.
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