Calculating Leave Salary in UAE: A Comprehensive Guide
Understanding how to perform a UAE leave salary calculation is crucial for both employees and employers to ensure compliance with the UAE Labour Law. This guide will explain the intricacies of leave salary calculation in UAE MOHRE (Ministry of Human Resources and Emiratisation), including overtime calculation in UAE, its legal context, and other considerations on leave.
UAE Leave Salary Law
The Federal Decree-Law No. 33 of 2021 stipulates that “the employee is entitled to annual leave with full pay, including basic salary and any allowances as stipulated in his contract.” The UAE Labour Law on annual leave mandates that employers must compensate employees for any unused annual leave balance at the time of termination or resignation.
Key Points of Annual Leave
Eligibility:
- Confirmed full-time employees with one year of service are entitled to 30 calendar days of annual leave.
- For service ranging from six months to one year, employees earn two days of leave for each month.
Payment Details:
- Leave salary comprises basic salary and housing allowance, if applicable.
- Depending on the employment contract, some further benefits may apply, including cash allowance.
How to Calculate Leave Salary in the UAE
To understand how to calculate leave salary in UAE, follow these steps:
Step 1: Determine the Employee’s Basic Salary
Basic salary is the foundation for any leave salary calculation. The basic salary forms the core component of an employee’s compensation package. For example:
- Basic Monthly Salary: AED 8,000
- Housing Allowance (if applicable): AED 2,000
Step 2: Identify Leave Duration
Account for the leave days the employee is entitled to based on their completed years of service. For one completed year, it is 30 calendar days.
Step 3: Calculate Daily Rate of Salary
To find the daily rate of salary, which is essential for daily salary calculation UAE:
Daily Rate of Salary = (Monthly Salary inclusive of Allowances) / 30
Example:
Daily Rate of Salary = AED 10,000 / 30 = AED 333.33
Step 4: Multiply by the Number of Leave Days Availed
For 15 days of leave:
Leave Salary = Daily Rate of Salary × 15 = AED 333.33 × 15 = AED 5,000
This ensures the workforce is remunerated properly for days off work. For more precise calculations, you can use a leave salary calculator UAE online.
Factors Affecting Leave Salary
- Type of Leave
- Annual Leave: Fully paid as per the employment contract.
- Sick Leave: The UAE Labour Law sick leave policy entails full pay for the first 15 days, half pay for the next 30, and no pay thereafter.
- Maternity Leave: Sixty days are given, with 45 days at full pay and 15 days at half pay.
- Employment Contract Terms agreed upon in the employment contract may affect leave salary, such as allowances in addition to one’s basic salary. The basic salary serves as the primary component for calculating various benefits and entitlements.
- Payment for Unused Leave: In the event of resignation or termination, an employee shall be paid for annual leave accrued but not availed of. This is where leave encashment calculation UAE comes into play. Encashment of unused leave is an important consideration in leave salary calculation.
Overtime Calculation in UAE
Understanding overtime calculation in UAE is essential for both employers and employees. The overtime calculation process is crucial for ensuring fair compensation for additional work hours. Here’s how to calculate overtime in UAE:
- Determine the normal working hours (typically 8 hours per day or 48 hours per week).
- Calculate the hourly rate:
Hourly Rate = (Basic Salary / 30) / 8
- For overtime on regular days:
Overtime Rate = Hourly Rate × 1.25
- For overtime on rest days:
Overtime Rate = Hourly Rate × 1.5
Overtime calculation in UAE as per labour law stipulates that overtime should not exceed two hours per day unless there are exceptional circumstances. It’s important to note that there are different types of overtime, including force majeure overtime and structural overtime. Force majeure overtime applies in emergency situations, while structural overtime is planned and regular additional work hours.
Example Calculation
Scenario: An employee has a basic salary of AED 12,000 with an annual leave balance of 10 days.
- Daily Rate of Salary: AED 12,000 ÷ 30 = AED 400
- Leave Salary: AED 400 × 10 = AED 4,000
The employee gets AED 4,000 for their 10 days of unused leave. This calculation is based on the employee’s basic salary, which forms the foundation for leave salary computations.
Different Types of Leaves in the UAE
Sick Leave
Employees are entitled to sick leave in accordance with the UAE Labour Law sick leave policy, once they have completed their probationary period. Documentation is required unless explicitly excluded; sick leaves without providing a medical certificate in UAE are normally unpaid.
Annual Leave
MOHRE annual leave guidelines state that employees are entitled to 30 calendar days of paid annual leave per year of service.
Emergency Leave
Emergency leave is available during certain unique circumstances, typically requiring employer approval.
Other Types of Leave
- Parental Leave: Five days fully paid during the first six months of childbirth.
- Umrah or Hajj Leave: One leave without pay of up to 30 days for religious pilgrimages.
- Compassionate Leave: 3-5 days for the death of an immediate family member.
- Study Leave: Some employers offer study leave for employees pursuing further education.
- Part-time Leave: Applicable for employees working on a part-time basis.
- Bereavement Leave: Typically granted for the loss of a close family member, with duration varying by employer.
Public Holidays
The UAE observes several public holidays, including:
- Eid al-Fitr
- Eid Al Adha
- National Day
These holidays are typically paid and do not count against an employee’s annual leave balance.
Frequently Asked Questions About Leave Entitlement in the UAE
- How is annual leave calculated for part-time workers? Annual leave for part-time employees is prorated based on their working hours. Use an annual leave calculator UAE for precise calculations.
- Does annual leave include public holidays? Yes, official public holidays are considered part of the annual leave if they fall during the leave period.
- Can unused leave be carried forward? Unused leave can be carried forward to the succeeding year with employer approval or encashed as per UAE Labour Law leave salary rules.
- How is leave salary calculated after resignation? It includes payment for any accrued but unused annual leave days.
- What are the leave salary rules in UAE for 2023? Leave salary calculation in UAE 2023 follows the Federal Decree-Law No. 33 of 2021, with potential updates from MOHRE (Ministry of Human Resources and Emiratisation).
- How is leave salary calculated in the final settlement UAE? Leave salary calculation in final settlement UAE includes payment for all accrued and unused annual leave days, calculated based on the employee’s last basic salary.
Conclusion
Understanding leave salary calculation in the UAE is crucial for creating a workplace of equity and transparency. Compliance with the MOHRE UAE Labour Law guidelines benefits both employees and employers. Good leave management takes care of employee well-being while ensuring business compliance.
It’s important to note that leave salary law in UAE may also interact with other aspects of employment, such as the notice period, termination of contract, and end-of-service benefits. Employees should be aware of their rights regarding fully paid leaves, cash allowances, and even provisions like breastfeeding breaks for new mothers. The basic salary plays a pivotal role in these calculations and entitlements.
For more information on UAE leave salary calculation, overtime calculation in UAE, and other employment-related topics, visit globaljobupdates. Utilize online tools such as the gratuity calculator, annual leave calculator UAE, and overtime calculator UAE to stay informed about your rights an
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