Best Leave Management Software in Dubai for SMEs 2026: UAE Annual Leave Guide

Before selecting leave management software, Dubai SMEs need to understand what the law requires. Federal Decree-Law No. 33 of 2021 (the UAE Labour Law) sets out clear entitlements for every employee working in mainland UAE. Non-compliance exposes businesses to MOHRE fines, employee complaints, and reputational risk. Here is a complete breakdown of leave entitlements your software must handle automatically.

Annual Leave Entitlement

Employees who have completed one full year of continuous service are entitled to 30 calendar days of annual leave. This is a significant upgrade from the previous 2002 Labour Law and applies to all nationalities working under mainland UAE contracts. Employees with less than one year of service accrue annual leave at 2 calendar days per month, giving them a prorated entitlement. Annual leave must be paid in advance at the employee’s basic wage plus any fixed recurring allowances.

Sick Leave

After completing the probation period, employees are entitled to up to 90 days of sick leave per year, structured as follows: the first 15 days at full pay, the next 30 days at half pay, and the remaining 45 days as unpaid leave. Sick leave during the probation period is at the employer’s discretion. Employees must provide a medical certificate from a UAE-licensed medical practitioner. Leave management software should flag consecutive sick leave patterns and alert HR when an employee transitions between full pay and half pay thresholds.

Compassionate Leave

Under Article 31 of the UAE Labour Law, employees are entitled to five days of paid compassionate leave in the event of the death of a spouse, parent, child, sibling, grandparent, or grandchild. This is a non-negotiable statutory entitlement that must be recorded separately from annual leave.

Maternity Leave

Female employees are entitled to 60 days of maternity leave: 45 days at full pay and 15 days at half pay. This applies regardless of whether the birth is normal or via caesarean section. After returning from maternity leave, nursing mothers are entitled to two nursing breaks per day for up to 18 months from the date of birth. Leave software must track maternity leave separately, enforce the correct pay split, and record nursing break entitlements.

Paternity Leave

New fathers are entitled to five working days of paid paternity leave, which must be taken within six months of the child’s birth. This is a statutory right that cannot be withheld, and it must be processed separately from annual leave in your leave management system.

Study Leave

Employees who have completed at least two years of service may apply for 10 days of paid study leave per year for examination purposes, subject to employer approval and supporting documentation from an accredited educational institution. Leave management software can capture study leave requests, attach supporting documents, and apply the approval workflow automatically.

End of Service and Leave Encashment

Upon termination or resignation after completing one year of service, employees are entitled to receive cash payment for any accrued but unused annual leave calculated at their daily wage. This includes both the basic wage and fixed allowances. Automated leave tracking ensures no leave balance discrepancy arises at the point of end of service calculation, which is one of the most common sources of employee-employer disputes in Dubai.

UAE Public Holidays

Employees are entitled to a minimum of 13 paid public holidays per year, including Islamic holidays that are announced annually by the UAE government. Public holidays that fall during annual leave must be added back to the employee’s leave balance. Leave management software configured for the UAE should include a built-in UAE holiday calendar that updates automatically when the government announces Islamic holiday dates each year.