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Compliance

UAE Labour Law Leave Policy Explained for Employers

These rules are not complicated. They are just easy to get subtly wrong in a spreadsheet that one person maintains.

12 May 2026 · 7 min read

This is a practical summary of what employers configure in an attendance system, not legal advice. Confirm your final policy with your PRO or legal advisor before you publish it to staff.

The settings that matter most

  • Annual leave: 30 calendar days a year after one year of service; 2 days a month between six months and a year
  • Sick leave: after probation, 90 days a year in bands — 15 full pay, 30 half pay, 45 unpaid
  • Overtime: 125% of the basic hourly rate; 150% for hours between 10pm and 4am on normal shifts
  • Rest day work: compensatory day off, or 150% of the basic rate
  • Ramadan: working hours reduced by two per day

Where the errors actually happen

Almost never in the rate. Almost always in what counts as a working hour: unpaid break deduction, grace periods on late arrival, and whether overtime is calculated daily or on the weekly total. Two companies with identical policies produce different payroll because those three settings differ.

Configure it once, in the system

The point of putting these rules in the attendance platform rather than a spreadsheet is that every timesheet is then calculated identically, by the same rule, with an audit trail showing which policy version applied in which month.

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