How to Calculate Paid Annual Leave Under Qatar Labour Law

Paid annual leave is a fundamental statutory right for all private-sector employees in Qatar under Law No. 14 of 2004 (Qatar Labour Law). However, confusion often arises regarding when leave accrues, how leave pay is calculated, and what happens to unused vacation days upon resignation or termination.

Here is a comprehensive legal breakdown of annual leave entitlements, formulas for calculating leave salary, and rules governing encashment.

1. Statutory Annual Leave Entitlements

Under Article 79 of Qatar Labour Law, an employee’s annual leave allowance increases based on their continuous length of service with the employer:

Continuous Service Completed	Minimum Paid Annual Leave Entitlement
Less than 1 Year	Pro-rated leave (if permitted after completion of initial service)
1 Year to 5 Years	21 calendar days per year (3 full weeks)
5 Years and Above	28 calendar days per year (4 full weeks)

⚠️ Calendar Days vs. Working Days: The law defines annual leave in calendar days, meaning regular rest days (Fridays) and public holidays falling within an employee's continuous leave block count toward the 21 or 28 days unless company policy or your employment contract explicitly states otherwise.

2. Calculation Formula for Annual Leave Salary

Under Article 80, employees are entitled to receive their full wage for the duration of their approved annual leave.

The Advance Payment Rule

Unlike standard monthly payroll, Qatar Labour Law mandates that an employee's leave salary must be paid in full before the employee commences their vacation.

Calculation Formula:

Daily Basic Wage = Monthly Basic Salary / 30 days

Total Leave Pay = Daily Basic Wage x Approved Leave Days

Note: Allowances such as housing or transportation are handled according to your contract terms during continuous leave, but basic wage must be guaranteed in advance.

3. Payout of Unused Annual Leave upon Resignation / Termination

Under Article 81, if an employee leaves their job (via resignation or termination) before taking their accrued annual leave, the employer is legally obligated to pay out the balance of untaken leave days in the final settlement.

Pro-Rata Exit Formula:

Accrued Unused Days = ( Months Worked in Current Year /12) x Annual Entitlement

Leave Encashment Settlement = Accrued Unused Days x (Monthly Basic Salary/30)

Key Rules on Carrying Over Vacation Days

• Postponement Cap: An employer may split or postpone up to half (50%) of an employee's annual leave entitlement to the following year due to operational work requirements.

• No Total Forfeiture: An employer cannot legally force an employee to forfeit accrued paid leave without financial encashment.