Leave salary calculation often sparks questions among both employers and employees in the UAE. It’s natural to wonder how this payment structure works and what entitlements are in place. At Rhodes & Collins, we’re here to unravel the complexities and provide a clear understanding of leave salary and its intricacies.

Unveiling Leave Salary

After completing one year of service with a company, employees earn the right to receive a full month’s pay along with 30 days off (or as specified in the contract). This payment, termed leave salary, is granted to employees without them having to work during their leave period.

Understanding Fully-Paid Leave Entitlements

As per Article 29 of Federal Decree-Law No. 33 of 2021, annual leave entitlements are categorized based on the employee’s tenure:

• 30 Days Leave: Employees who have served one year are entitled to 30 days of fully paid leave.
• 2-Day Leave: Individuals with a tenure of at least six months but less than one year receive two days of fully paid leave per month.
• Part-Time Leave: Part-time employees receive annual leave based on the actual hours worked as stipulated in their employment contract.

Demystifying Leave Salary Calculation

Calculating leave salary involves several factors tied to the employee’s salary and the duration of their annual leave entitlement. Employers must adhere to specific rules, including:

• Ensuring employees receive their full salary for the work done before the leave starts.
• Compensating employees for their annual leave before its commencement.
• Calculating annual leave based on the full salary, encompassing basic salary, housing allowance, and other standard allowances applicable in a typical working month.

Exploring the UAE Labour Law on Leave Salary

Article 29 of Federal Decree-Law No. 33 of 2021 lays down several provisions related to leave salary:

• Workers can take their entitled leave during the year, with agreed-upon leave dates communicated in advance.
• Employees have the flexibility to choose their leave start date but must provide a 10-day notice.
• Unused annual leave can be carried over to the next year with employer approval.
• Regular pay is provided during annual leave.
• Legal or agreed-upon holidays during annual leave are considered part of the leave period.
• Employees can’t receive additional payment for extending leave beyond the annual leave period.
• Employers can’t prevent employees from using accrued leave or receiving compensation for unused leave.

Addressing Provisions of Unused Leaves & Deductions

Employees can opt for cash in lieu for unused yearly leave, calculated based on their monthly basic salary. Some unused leave can be carried over to the next year per company policies. Leave without pay affects overall salary and leave salary calculations.

Navigating Other Leave Types

Besides annual leave, the UAE provides additional leave types:

• Maternity Leave: Female workers are entitled to a 60-day maternity leave, including 45 days at full pay and 15 days at half-pay.
• Parental Leave: Parents of newborns receive a 5-day fully paid leave within six months of the birth.
• Hajj And Umrah Leave: Private sector employees are granted up to 30 days of unpaid Hajj leave once during their employment.

Simplifying Leave Salary Management with Rhodes & Collins

Rhodes & Collins offers tailored solutions for leave salary management, time-tracking, shift scheduling, and payroll. By seamlessly integrating with existing systems, Rhodes & Collins simplifies leave management and enhances operational efficiency.

Leveraging Rhodes & Collins for Leave Salary Management

• Streamline time-tracking with a mobile app or biometric system.
• Seamlessly integrate attendance management with payroll and other HR functions.
• Gain real-time access to comprehensive attendance data for efficient management.
• Facilitate leave requests, allowances, and histories with ease and precision.

Utilizing Pro Tips for Employers

• Establish clarity regarding the holiday year and leave coordination processes.
• Require employees to proactively coordinate annual leave with line managers.
• Consider peak holiday times and implement fair scheduling policies.
• Utilize Rhodes & Collins’s solutions to simplify leave tracking and payroll management.

Addressing FAQs about Leave Salary Calculation in the UAE

• Is leave salary calculated based on basic salary or gross salary?
• Can employees be terminated during annual leave?
• When is the leave salary paid?
• Can employees work elsewhere during annual leave?
• What if the employee falls ill during annual leave?
• What if the employee doesn’t report after the end of annual leave?

Navigating leave salary calculation in the UAE requires understanding legal provisions, company policies, and best practices. At Rhodes & Collins, we’re committed to providing guidance and support to optimize leave management processes for employers and employees alike.