How to Calculate UAE Leave Encashment
Turn your unused annual-leave days into a cash figure in three steps, with a worked example and a lookup table.
→ Open the UAE Leave Encashment Calculator
Leave encashment is one of the simplest end-of-service numbers to work out — as long as you use the right salary figure. Here is the method.
Step 1 — Use basic salary, not total salary
End-of-service leave encashment is paid on basic salary only. Take your basic monthly figure and ignore housing, transport and other allowances.
Step 2 — Get the daily wage
Daily wage = Basic monthly salary ÷ 30
Step 3 — Multiply by unused days
Encashment = Daily wage × unused annual-leave days
Your unused-days figure comes from your HR leave record: full annual entitlement (30 days a year, pro-rated) minus the days you actually took.
Worked example
Basic salary AED 7,500, with 18 unused leave days.
| Step | Calculation | Result |
|---|---|---|
| Daily wage | 7,500 ÷ 30 | AED 250 |
| Unused days | from HR record | 18 days |
| Encashment | 250 × 18 | AED 4,500 |
Quick lookup (per unused day)
| Basic salary | Daily wage | 10 days | 30 days |
|---|---|---|---|
| AED 4,500 | 150 | 1,500 | 4,500 |
| AED 6,000 | 200 | 2,000 | 6,000 |
| AED 9,000 | 300 | 3,000 | 9,000 |
| AED 12,000 | 400 | 4,000 | 12,000 |
Because the daily wage scales linearly, you can read off any balance quickly. Then add your gratuity and notice pay and total the lot in the final settlement calculator.
Handling a part-year balance
In your final year you rarely have a clean 30-day entitlement. You accrue 2.5 days of leave per completed month (30 ÷ 12). So an employee who works 7 months into their final year accrues about 17.5 days for that period, then subtracts whatever they actually took. If they took 5 days, the unused balance to encash is 12.5 days. At AED 6,000 basic that is 200 × 12.5 = AED 2,500. The calculator lets you enter the exact day balance so you never have to reconstruct the accrual manually.
Key takeaways
- Use basic salary only, divided by 30, for the daily wage.
- Multiply the daily wage by your genuinely unused annual-leave days.
- Leave accrues at about 2.5 days per completed month.
- There is no UAE income tax, so encashment is paid gross.
- A higher basic-salary component produces a larger encashment for the same days.
Frequently asked questions
What salary is used for UAE leave encashment?
Basic salary only. Divide it by 30 for a daily wage, then multiply by your unused leave days.
How do I know my unused leave days?
Take your pro-rated annual entitlement (30 days per year) and subtract the leave days you actually used, per your HR record.
Is encashment different from being paid while on leave?
Yes. Leave taken during employment is paid at your full wage; encashment of unused leave at the end of service is paid on basic salary only.
Is leave encashment taxed in the UAE?
There is no personal income tax on salaries in the UAE, so leave encashment is paid gross.
How many leave days do I accrue each month?
About 2.5 days per completed month, which is 30 days spread over a full year of service.
Is leave encashment taxed in the UAE?
No. There is no personal income tax on salaries in the UAE, so encashment is paid gross.
What if I took more leave than I accrued?
If you are in a negative balance at exit, the employer may deduct the over-taken days from your final settlement, using the same daily-wage basis.
Related calculators & guides
More UAE employment calculators
Calcnate keeps a full set of law-accurate UAE tools so you can check every part of an exit or contract in one place. Each is built on Federal Decree-Law 33/2021 and the same figures explained above:
- UAE Gratuity Calculator — your end-of-service lump sum on the 21/30-day bands.
- UAE Final Settlement Calculator — gratuity, leave, notice and pending pay combined.
- UAE Notice Period Calculator — notice length and pay in lieu.
- UAE Leave Encashment Calculator — cash value of unused annual leave.
- UAE Probation Period Calculator — the six-month rules and notice.
- UAE Maternity Leave Calculator — the 45+15 day pay split.
- UAE Unemployment Insurance (ILOE) Calculator — your involuntary-loss payout.
Browse everything on the UAE hub.