UAE Employee Leave Salary Deductions: What's Legal in 2025

Key Takeaways

• UAE employees are entitled to 30 days paid annual leave after one year of service
• During probation, employees accrue 2 days leave per month worked
• Unused annual leave can be carried forward or compensated upon termination
• UAE employers must pay salaries through the Wage Protection System (WPS)

Employers in UAE cannot deduct salary during annual leave. Article 29(6) of Federal Decree-Law No. 33 of 2021 guarantees employees full salary during approved leave, including basic pay and regular allowances paid before leave begins. Deductions are only legal under eight specific circumstances outlined in Article 25, with a maximum 50% total limit. Illegal deductions trigger penalties from AED 5,000

to AED 1,000,000—penalties that doubled in August 2024. Understanding these rules protects both employee rights and employer compliance in the UAE's increasingly enforced labour framework.The stakes are high. With MOHRE conducting 688,000 inspections in 2024 alone and detecting over 12,500 violations, salary deduction compliance has become a critical issue. Recent cases include a AED 10 million

fine for fictitious employment violations, demonstrating the UAE government's commitment to enforcing labour protections. Whether you're an employee verifying your rights or an employer ensuring compliance, this guide provides everything you need to know about leave salary deductions under current UAE law.Understanding your leave salary entitlements under UAE lawFederal Decree-Law No. 33 of 2021,

effective February 2, 2022, governs all private sector employment in the UAE. The law establishes clear protections for employee salary during leave periods, with specific provisions varying by leave type.Annual leave salary entitlements form the foundation of employee rights. After completing one year of continuous service, employees receive 30 calendar days of paid annual leave. For those with six

to twelve months of service, the entitlement is 2 days per month. The critical distinction lies in how salary is calculated: during active employment, employees receive their full monthly salary including basic pay and all regular allowances (housing, transportation, cost of living). This means if your total compensation package is AED 12,000 monthly, you receive the full AED 12,000 for your 30-day

leave period.However, upon termination or resignation, unused leave days are paid out based on basic salary only, excluding allowances. This distinction frequently causes confusion but is clearly established in Article 19 of Cabinet Resolution No. 1 of 2022. The practical implication: while employed and taking leave, you maintain your full income stream; when leaving the company, unused leave compensation

uses only the base salary component.Leave salary must be paid before the employee commences their leave—not with the regular month-end salary after leave is taken. This advance payment requirement protects employees from financial hardship during their time off and is a mandatory employer obligation under Article 29.For those wondering about sick leave and maternity leave, different rules apply.

Sick leave calculations use basic salary only with a structured percentage breakdown: 100% for the first 15 days, 50% for the next 30 days, and zero payment for the final 45 days (maxim...

About This Article

This article provides general information about UAE labour law and employment regulations. The information is based on Federal Decree-Law No. 33 of 2021 and subsequent amendments. For specific legal advice regarding your situation, please consult with a qualified legal professional or contact the Ministry of Human Resources and Emiratisation (MOHRE).