UAE unused annual leave 2026: Can you cash it out, carry it forward or lose it?

Dubai: If you didn’t get the opportunity to go on vacation this year, you may have accumulated a number of leave days. So, what exactly can you do with them – use them in one go, cash them out, or carry them forward into the next year? We break down the rules around unused annual leave, based on the UAE’s Labour Law, so that you’re not in for any surprises. How many days of annual leave do employees in the UAE receive? Article 29 of the UAE’s Labour Law – Federal Decree-Law No. 33 of 2021 – clearly outlines the rules around annual leave , as pertaining to private sector employees. According to the legislation, the worker is entitled to an annual leave with full pay for: Not less than 30 calendar days (or 22 working days) for each year of his/her extended service. Two calendar days (or 1.8 working days) for each month if his/her service period is more than six months and less than one year. A corresponding leave for parts of the last year he/she spent at work, in the event that his/her service ends before using the annual leave balance. Can I get paid for any unused annual leave? The short answer is – yes. As per Article 19 of Cabinet Resolution No. 1 of 2022, a worker is entitled to receive a cash payment for unused annual leave, and the amount is calculated based on the employee’s basic salary. The law states: “If the employee’s service ends, he shall be paid a cash allowance for the balance of his legally due annual leave, according to the basic salary.” This means employees can receive payment for any accrued annual leave when their employment contract ends, whether by resignation or termination. If an employee leaves mid-year, they are still entitled to receive payment for leave days accumulated up until the period in which, they stopped working. This is according to clause 9 of Article 29, which states: “The Worker is entitled to receive wages for the days of the entitled rest days if he leaves the work before using it, regardless of their duration, in relation to the period for which he has not obtained his leave.” Can I carry forward unused annual leave? The UAE Labour Law also makes provisions for carrying forward unused leave into your next year of service. However, it comes with certain caveats. Musa Dayani, a Dubai-based public relations officer, said: “You can carry forward no more than 50% of your annual leave to the next year.” If a worker’s unused leave is more than this number, the days must either be taken before the end of the leave year, or encashed, subject to the employer’s agreement. This is in accordance with Article 19(1) of Cabinet Resolution No. 1 of 2022, which states: “The Worker may, upon the approval of the Employer and in accordance with the applicable organisational regulations in the Establishment, carry forward up to half of his annual leave entitlement to the following year.” Can an employer deny my request for payment or carrying forward of unused leave? It’s worth noting that both carrying forward leave, and receiving cash in lieu of unused leave, are subject to the company’s policies, and based on an agreement reached between the employer and the employee. That said, employers cannot coerce employees to work continuously for two years, without granting them their leave days, as per the law. Article 29(8) of the UAE Labour Law states: “The Employer may not prevent the Worker from benefiting from his entitled annual leave for more than two years, unless the Worker wishes to carry it forward or obtain a cash allowance for it in accordance with the organisational regulations in force in the Establishment, and what is specified by the Executive Regulation of this Decree by law.”