Unpaid leave is time off that the employer agrees to but does not pay for. It typically arises once an employee has exhausted their paid leave or takes time off that falls outside any paid entitlement.
What it means
Because the employee is not paid for the days taken, unpaid leave reduces that period's earnings. For a salaried employee the salary is pro-rated down by the unpaid days; for a waged employee the unworked hours simply are not paid. Less earnings in the period also means less PAYE and lower UIF for that period.
Where it fits in
Unpaid leave feeds into the pay run as a reduction to gross remuneration, applied on a pro-rata basis. It contrasts with paid leave, where earnings continue as normal, and it must be captured accurately so the period is neither over- nor under-paid.
Key rules
- Approved time off with no pay for the days taken.
- Reduces the period's gross remuneration, usually pro-rata.
- Lower earnings mean lower PAYE and UIF for the period.
- Distinct from paid leave, where earnings continue.
