Does Unpaid Leave Affect Gratuity in the UAE? (2026)

Not all time away from work counts toward your gratuity in the UAE. This page explains which types of leave reduce your qualifying service period, and which don’t.

The General Rule

Gratuity is calculated based on continuous, paid service. Days of unpaid absence are generally excluded when calculating your total qualifying service period, which can reduce your final gratuity slightly if you’ve taken extended unpaid leave at any point during your employment.

Leave Types That Do NOT Affect Gratuity

• Paid annual leave — does not reduce your qualifying service period.
• Paid sick leave — does not reduce your qualifying service period.
• Paid maternity leave — does not reduce your qualifying service period.
• Public holidays — have no effect on gratuity calculations.

Leave Types That CAN Affect Gratuity

• Unpaid leave approved by your employer for an extended period — these days are typically excluded from your total qualifying service.
• Unpaid sick leave beyond what your contract or the law covers as paid.
• Unauthorized absence — time away without approval can also affect your continuous service calculation, separate from any disciplinary consequences.

How This Is Calculated in Practice

If you took, for example, 60 days of unpaid leave across your employment, those 60 days are generally subtracted from your total service period before applying the 21-day / 30-day gratuity formula. For most employees with only short, occasional unpaid leave, the effect on the final gratuity figure is small. For employees who’ve taken extended unpaid leave (for example, an extended trip home, or an unpaid career break), the effect can be more meaningful, especially if it pushes your service period just under a milestone like the 5-year mark.

A Practical Example

An employee with a basic salary of AED 9,000 who worked for what would otherwise be exactly 5 years, but took 45 days of unpaid leave during that period, would have their qualifying service calculated as slightly under 5 years once those days are excluded — which matters because gratuity jumps from a 21-day rate to a 30-day rate specifically at the 5-year mark. In a case like this, unpaid leave taken near a milestone year is worth being aware of before finalizing your resignation date.

What You Should Do

• Keep your own record of any unpaid leave taken throughout your employment, including exact dates.
• Ask HR for a formal statement of your total qualifying service period before resigning, especially if you’re close to a service milestone.
• Factor unpaid leave into your own estimate when using the UAE Gratuity Calculator, by adjusting your effective service period slightly downward if you’ve taken meaningful unpaid leave.

Frequently Asked Questions