Does unpaid leave count toward gratuity in the UAE?
No. Article 33 of Federal Decree-Law No. 33 of 2021 says approved unpaid leave is not part of the service term, and Article 51 says unpaid days of absence are not counted when calculating end-of-service benefits. Gratuity is worked out on the paid service only.
How the exclusion changes the result
Gratuity is 21 days of basic wage per year for the first five years and 30 days per year after that, pro rata for part years, once a year of continuous service is complete. Removing unpaid days shortens the service and can move a worker below a year-five threshold or below the one-year minimum.
Article 30 applies the same rule to the 45 unpaid days a mother may take after maternity leave.
Records the employer needs
Because the deduction is in days, the employer needs a dated record of every unpaid day over the whole employment. A balance that was overwritten cannot prove when unpaid leave happened, which is a common weak point in disputes.
How SupaJack Construct records it
Every leave day is an itemised ledger entry with its date and type, and unpaid leave flows to the payslip as its own deduction line. The final settlement calculates gratuity on basic wage and applies the two-year cap from Article 51.
Related tools and guides
See the UAE labour law guide for contractors, the final settlement calculator, the gratuity calculator, the annual leave calculator, the unpaid leave deduction calculator, payroll and WPS in SupaJack Construct, time and attendance and the meaning of basic salary.
Worked example
An electrician joined on 1 January 2021 and leaves on 31 December 2025, five years. He took 60 days of approved unpaid leave in 2023. His service for gratuity is five years less 60 days, so it falls just under five years and every year is counted at 21 days.
Questions people ask
Does sick leave at half pay count?
Yes. It is paid leave, so it is part of service.
Does unpaid sick leave count?
Article 51 excludes unpaid days of absence.
Is gratuity on basic or total wage?
On the last basic wage.