Q: If an employee did not use the annual leave continuously for three years, how to calculate the leave salary? A: Normally, the leave salary will be calculated annually and it can be carried forward to the next years if the company has a policy…

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How to calculate the leave salary if an employee did not use the annual leave?

Hi Sir,

If an employee did not use the annual leave continuously for three years, how to calculate the leave salary?

Farsana K. Aliyar

Laila Hamza Al Mulla Advocates and Legal Consultants

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7 Feb 2024, 13:36

Normally, the leave salary will be calculated annually and it can be carried forward to the next years if the company has a policy.

And the annual salary will be calculated on the basis of basic salary if he carries over the annual leaves all these years.

Otherwise, it has different calculations according to UAE labor law. If you need further clarification we will explain you more.

7 Feb 2024, 13:41

So, what I understand is that for any unused annual leave of more than 2 years (minimum), leave salary will be calculated on the basis of basic salary only.

Otherwise, leave salary is calculated on the basis of basic plus allowances except overtime (in case of any fixed OT).

7 Feb 2024, 13:59

Yes. for encashment in every year it will be based on full salary.

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How to calculate the leave salary if an employee did not use the annual leave?