# Regulatory Compliance Category > Labour Relations and Legislation Forum >  Unpaid leave and UIF

## J7J

Hi,

If unpaid leave is deducted from an employee's salary must:

1)  The unpaid leave be calculated as a portion of the GROSS or NET salary ie.  Say an employee earns R2,900 per month and one day unpaid leave is to be deducted in a month with 22 working days.  Will the deduction for unpaid leave be R2,900 / 22 days = R131.82, or will it be after UIF R2,900 - R29 (1% contribution for UIF) = R2,871 / 22 days = R130.50?

2)  The UIF be calculated on the GROSS salary before or after the unpaid leave deduction: ie.  Say an employee earns R2,900 per month and R131.82 unpaid leave is deducted.  Will the 1% contribution for UIF be R2,900 x 1% = R29, or R2,900 - R131.82 = R2,768.18 x 1% = R27.68?

Kindly assist.

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## CLIVE-TRIANGLE

Unpaid leave is not really a deduction; it merely serves to illustrate reduced earnings. The employee is being paid for actual time worked and the UIF is calculated on qualifying earnings.
In 1) R131.82 and 2) R27.68

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J7J (15-Jul-13)

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## J7J

Thank you, Clive.

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## TravisZA

> Unpaid leave is not really a deduction; it merely serves to illustrate reduced earnings. The employee is being paid for actual time worked and the UIF is calculated on qualifying earnings.
> In 1) R131.82 and 2) R27.68


Does an employee still accrue annual leave while on unpaid leave? For example if an employee is severely sick, and is on unpaid leave because they have gone through all their medical/sick and paid leave do they still accrue their paid leave each month?

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## Dave A

> Does an employee still accrue annual leave while on unpaid leave?


Apparently yes.
(I discovered this when one of my staff went on unpaid maternity leave).
The logic is while the absence is unpaid, the employee is still in the employer's employment.

However, I believe it's a "standard practice" thing rather than strictly determined by legislation. This means* an employment contract could specify that annual leave does not accumulate while on unpaid leave.

*See following two posts.

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## Andromeda

Hi Dave

This extracted from the BCEA:

20. 	Annual leave
(1) 	In this Chapter, "annual leave  cycle" means the period of 12 months' employment with the same employer immediately following-
(a) 	an employee's commencement of employment; or
(b) 	the completion of that employee's prior leave  cycle. (2) 	An employer must grant an employee at least-
(a) 	21 consecutive days' annual leave  on full remuneration in respect of each  annual leave  cycle; or
(b) 	by agreement, one  day  of annual leave  on full remuneration for every 17  days  on which the employee worked or was  entitled to be paid;
(c) 	by agreement, one  hour of annual leave  on full remuneration for every 17  hours on which the employee worked or was  entitled to be paid.

The wording in (b) and (c) implies that no leave is accrued when employee is not working. Well that is how I read it.

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Dave A (09-Nov-17)

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## Dave A

Andromeda, my thanks for coming up with the relevant extract.




> The wording in (b) and (c) implies that no leave is accrued when employee is not working. Well that is how I read it.


When it comes to (b) & (c) note the "by agreement".

The default position is (a) - 21 consecutive days' annual leave on full remuneration in respect of each annual leave cycle.
The annual leave cycle is clearly defined in the post above.

I stand corrected on it being "standard practice". When it comes to employment covered by the BCEA, quite clearly it's actually statutory.

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## TravisZA

> Andromeda, my thanks for coming up with the relevant extract.
> 
> 
> When it comes to (b) & (c) note the "by agreement".
> 
> The default position is (a) - 21 consecutive days' annual leave on full remuneration in respect of each annual leave cycle.
> The annual leave cycle is clearly defined in the post above.
> 
> I stand corrected on it being "standard practice". When it comes to employment covered by the BCEA, quite clearly it's actually statutory.


Thanks both for answering. Since we haven't specifically agreed that leave would only accrue for days worked then I suppose they would continue to earn annual leave while on unpaid leave

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