If a significant portion of your salary is registered as a Transportation Allowance in your new employment contract, you may wonder: When you are on leave and not going to work, can the employer deduct this amount from your salary?

According to UAE labor law, the answer is no if this allowance is determined as part of your salary in the contract.

Employees in the UAE are entitled to a minimum of 30 days of paid annual leave for each full year of service. The law also emphasizes that the employee must receive their salary during the leave period.

The important point here is that in the law, 'salary' does not only refer to the basic salary; it also includes benefits and allowances that are defined as part of the salary in the employment contract.

Therefore, if the Transportation Allowance is considered part of your salary in the contract, the employer cannot simply remove it from the vacation pay just because you are not commuting to work during your leave.

So when reviewing a job offer, do not just look at the basic salary figure; the salary structure and how each allowance is defined in the contract is very important.

This explanation is based on Federal Law No. 33 of 2021 regarding the regulation of labor relations in the UAE and does not substitute for official legal advice.
Source: Gulf Times