If you are working under a limited contract in the United Arab Emirates (UAE), it is important to understand how your leave salary is calculated. The leave salary, also known as the end-of-service benefit, is a lump sum payment that is given to employees at the end of their contract, in compensation for unused leave days.
Calculating your leave salary can be confusing, so here is a step-by-step guide to help you understand the process:
Step 1: Determine your basic salary
Your basic salary is the amount of money you are paid before any allowances or bonuses are added. This is the figure that will be used to calculate your leave salary.
Step 2: Calculate your daily wage
To calculate your daily wage, you need to divide your basic salary by 30, which is the average number of days in a month. This will give you your daily wage.
For example, if your basic salary is 10,000 AED per month, your daily wage would be 333.33 AED (10,000 divided by 30).
Step 3: Determine how many days of leave you have
In the UAE, employees are entitled to 30 days of annual leave per year. If you have not taken any leave during your contract, you will be entitled to a full 30 days of leave pay. If you have taken some leave, you will need to subtract those days from the total.
For example, if you have taken 15 days of leave during your contract, you will be entitled to 15 days of leave pay.
Step 4: Calculate your leave salary
To calculate your leave salary, you need to multiply your daily wage by the number of days of leave you are entitled to.
For example, if your daily wage is 333.33 AED and you are entitled to 15 days of leave pay, your leave salary would be 4,999.95 AED (333.33 multiplied by 15).
It is important to note that under UAE labor law, employees who resign before completing their contract are not entitled to a leave salary. However, if an employee is terminated by their employer, they are entitled to receive a leave salary even if they have not completed their contract.
In conclusion, calculating your leave salary in the UAE can be complex, but by following the steps outlined above, you can ensure that you receive the correct amount of compensation for your unused leave days. It is also important to seek advice from a legal professional if you have any questions or concerns regarding your leave salary or other employment benefits.