Unpaid leave and gratuity: how time off affects your payout

Gratuity is built on your length of service — so periods that don't count as service quietly shrink it. Unpaid leave is the main one.

Your end-of-service gratuity rewards the time you actually worked. Paid leave — your annual holiday, authorised paid sick leave — counts as service and doesn't cost you anything. But time taken without pay generally isn't counted toward your service period, which means it isn't counted toward your gratuity either.

How it works in practice

Say you've been with an employer for six years, but one of those years included two months of unpaid leave. Your gratuity is calculated on five years and ten months of service, not the full six. The effect is roughly your daily gratuity rate multiplied by the unpaid days — modest over a long career, but real, and worth getting right if you've had an extended unpaid break.

Accounting for it

The simplest approach is to subtract your unpaid days from your total service before calculating. Our UAE gratuity calculator has a dedicated field for unpaid leave that does this for you — enter the number of unpaid days and it trims the service period automatically. For the other countries, work out your service net of unpaid time and enter that.

What still counts

• Paid annual leave — counts fully.
• Authorised paid sick leave — generally counts.
• Public holidays and weekly rest — count; they're part of normal service.
• Unpaid leave — generally excluded from the service period.

Edge cases vary by country and contract, so if a long unpaid period materially affects your figure, confirm exactly how your employer and the local labour authority treat it. The comparison guide links to each country's detailed rules.