Does Unpaid Leave Reduce UAE Gratuity?
How unpaid days change your net service period · 6 min read ·
The short answer
Yes. Days of unpaid absence are not counted as service for UAE gratuity. They reduce the net service period used in the calculation.
Article 51 refers to continuous service but excludes days of absence without pay from the gratuity calculation. This matters most when unpaid leave brings you below a full year, below the five-year threshold, or close to a long-service cap.
Net service period formula
Paid annual leave, paid sick leave, public holidays, maternity leave, and paid notice normally remain part of service. The deduction is for unpaid absence or leave without pay.
Example: 3 years of employment with 45 unpaid days
Profile: AED 9,000 basic salary, 3 calendar years at the company, 45 unpaid leave days.
Without deducting unpaid leave, the estimate would be AED 18,900. The 45 unpaid days reduce the gratuity by AED 775 in this example.
When unpaid leave can change eligibility
- Near one year: 370 calendar days of employment with 10 unpaid days may become 360 net days, which can affect eligibility.
- Near five years: unpaid leave can keep part of the service in the 21-day formula instead of the 30-day formula.
- Long service: unpaid leave can slightly delay when the two-year gratuity cap applies.