Does Unpaid Leave Reduce UAE Gratuity?
How unpaid days change your net service period · 6 min read ·
By Asfandyar Khan, UAE Gratuity Check
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.
Sources used for this guide
Article 51: unpaid absence and service time
- Unpaid days do not count: Article 51(4) says “the unpaid days of absence from work shall not be included in the calculation of the service term”. They shorten your counted service, so they reduce gratuity, but they do not cancel it.
- One-year threshold: a full-time foreign worker needs one year of continuous service for gratuity (Article 51(2)). Part years are paid in proportion once that year is completed (Article 51(3)).
- Formula unchanged: gratuity is still 21 days' basic wage for each of the first five years and 30 days for each year after that (Article 51(2)), on your last basic wage (Article 51(5)), capped at two years' wage (Article 51(6)).
- Deadline: your dues are payable within 14 days of the contract ending (Article 53).
Enter your unpaid days in the advanced options of the gratuity calculator to see the effect on your own figure. Unpaid leave also changes your salary for the month; use the final settlement calculator for the full picture.
Unpaid leave and gratuity FAQs
Does unpaid leave reduce my UAE gratuity?
Yes, by shortening the service period used in the calculation. Article 51(4) excludes the unpaid days of absence.
Does paid annual leave count as service?
Article 51(4) excludes only unpaid days of absence, so paid leave is not removed from the service term by that clause.
Can unpaid leave take me below the one-year minimum?
Gratuity requires one year of continuous service (Article 51(2)). If unpaid days leave you short of a year, ask HR to show the service dates and the days excluded, and check with MOHRE if you disagree.
What if HR counted my unpaid days wrongly?
Ask for the calculation in writing. If it is not resolved, submit a request to MOHRE (Article 54(1)); see how to file a MOHRE complaint.