Leave salary is a crucial aspect of employee benefits, and employees and employers in the UAE must understand how to calculate it. Whether it’s annual leave, sick leave, or other types of leave, employees are entitled to receive payment while taking time off from work. But how do employers calculate leave salary?
Should it be based on the basic salary or the full salary? Let’s break down everything you need to know about leave salary in the UAE.
What is Leave Salary?
Leave salary refers to the payment an employee receives when they take leave from their work. In the UAE, employees are entitled to various types of leave, including:
- Annual Leave: Paid time off for vacation or personal reasons.
- Sick Leave: Paid leave when an employee is unable to work due to illness.
- Maternity Leave: For female employees who need time off for childbirth.
- Emergency Leave: For unforeseen events that require the employee’s immediate attention.
The leave salary ensures that employees continue to receive their earnings during their time off.
Leave Salary Calculation in the UAE
The UAE Labour Law dictates how leave salary should be calculated, and it is primarily determined by the employee’s basic salary, rather than the total salary (which may include allowances such as housing, transportation, etc.).
Annual Leave Salary Calculation
Employees are entitled to 30 days of annual leave per year after completing one year of service. The leave salary during annual leave is generally calculated as follows:
- Formula:
Leave Salary = (Basic Salary ÷ 30) × Number of Leave Days
This means that the employee will receive their basic salary for the number of leave days taken, regardless of any allowances they might receive. For instance, if an employee’s basic salary is AED 5,000, and they take 10 days of annual leave, their leave salary for that period would be calculated as:
- (5,000 ÷ 30) × 10 = AED 1,666.67.
Sick Leave Salary Calculation
Employees are also entitled to paid sick leave. However, the UAE Labour Law provides a tiered system for sick leave:
- The first 15 days of sick leave are paid at full salary.
- The next 30 days are paid at half salary.
- Any sick leave taken after 45 days is unpaid.
So, if an employee takes 10 days of sick leave within the first 15 days, they will receive their full basic salary. If they take sick leave within the next 30 days, they will receive half of their basic salary.
Maternity Leave Salary Calculation
Female employees are entitled to 45 days of maternity leave. The leave salary during this period is calculated as:
- The first 30 days are paid at full salary.
- The following 15 days are paid at half salary.
Emergency Leave Salary Calculation
Emergency leave is typically unpaid unless otherwise agreed upon in the employment contract. Employers may choose to offer leave salary based on the basic salary, depending on company policies.
Leave Salary Based on Basic Salary vs. Full Salary
A common question among employees is whether leave salary should be paid based on their basic salary or their full salary (which includes additional allowances like housing, transportation, etc.). According to the UAE Labour Law, leave salary is generally paid based on the basic salary.
Why Basic Salary?
The reason for this is that basic salary is considered the core component of an employee’s earnings, while allowances vary depending on company policies. For uniformity and fairness, the law mandates that leave salary be paid based on the basic salary.
FAQ: Frequently Asked Questions About Leave Salary in the UAE
1. How is leave salary different from regular salary?
Leave salary is paid during periods of authorized leave, such as annual leave or sick leave. Regular salary is the amount an employee earns for the work performed. Leave salary ensures employees continue to earn during their time off from work.
2. Can I take annual leave before completing one year of service?
In the UAE, employees are entitled to paid annual leave after completing one year of continuous service. However, some companies may allow employees to take leave before completing a full year, but it may be unpaid or pro-rated.
3. What if I have unused annual leave days?
Unused annual leave days may either be carried forward to the next year, or the employer may compensate the employee for unused days (in case of termination of employment). It’s important to check the employment contract for specific details.
4. Do I get paid for sick leave?
Yes, employees in the UAE are entitled to paid sick leave. The first 15 days are paid at full salary, the next 30 days at half salary, and any days after 45 days are unpaid. However, sick leave must be supported by a valid medical certificate.
5. Is maternity leave salary the same as leave salary?
Maternity leave salary is similar to leave salary because employers base it on the basic salary. However, the UAE Labour Law specifies that employers pay maternity leave at full salary for the first 30 days and half salary for the next 15 days.
Conclusion
Understanding how employers calculate leave salary and the rules surrounding it is essential for both employees and employers in the UAE. Employers primarily calculate leave salary based on basic salary, not the full salary. Employees are entitled to various types of leave, including annual, sick, and maternity leave, and employers pay them during these periods according to the laws that govern the UAE labour market.
Employees should always review their employment contracts to confirm the specific terms regarding leave entitlements and salary, as some companies may offer additional benefits beyond the statutory requirements.
You should read this also: When Should You Apply for Leave Vacation?
